Image Source : Krish Capital Pty Ltd

Index Update: On 22nd January 2025, the broader NZ market closed lower amidst sell-off in the energy sector. On the same day, S&P/NZX 50 Index witnessed a fall of 0.12% to end the session at 13,037.140 and S&P/NZX 20 Index fell by 0.18% to 7,821.470. However, S&P/NZX 10 Index declined by 0.46%. S&P/NZX All Energy encountered a fall of 1.03% to close at 1,663.630. However, S&P/NZX All Materials rose by 1.00%.  

Macro Update: NZ’s CPI increased 2.2% in the December 2024 quarter as compared with the December 2023 quarter, as per Stats NZ. This was the second consecutive quarter that the annual inflation rate was within the RBNZ’s target band of 1% - 3%. Between the June 2021 and June 2024 quarters, the annual inflation was above the target band.  

Top Market Movers: Among top gainers, Trade Window Holdings Limited (NZX: TWL) witnessed an increase of 7.50% to $0.215 per share. On the other hand, WasteCo Group Limited (NZX: WCO) declined by 8.33% to end at $0.022 per share.  

Commodity Update: The dollar dipped slightly in choppy trading on Wednesday, as markets awaited more details on President Donald Trump’s tariff strategy. Trump announced late Tuesday that his administration was considering a 10% tariff on Chinese imports starting February 1, coinciding with previously planned 25% tariffs on goods from Mexico and Canada. In commodities, gold rose by 0.17% to $2,763.70, silver climbed 0.13% to $31.54, while copper fell 0.45% to $9,250.00. Brent crude slipped by 0.01% to $79.26 per barrel as markets assessed the impact of Trump’s national energy emergency declaration on supply dynamics. 

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Source: Trading View, Analysis: Kalkine Group   

In July 2024, the S&P/NZX 50 index surpassed both the neckline of a Head and Shoulders pattern on the daily chart and a key resistance level marked by its 2023 high. This breakout indicates that the uptrend, which started in November 2023, is likely to persist and could push the index toward its historical peak from 2021. Since the breakout, the index has been forming higher highs and higher lows and bouncing off a short-term upward trendline established since June 2024 in the last trading session, reinforcing the prevailing uptrend. Meanwhile, the 14-day Relative Strength Index (RSI) is trading above its midpoint, reflecting positive market sentiment in the short-term.  

Our Stance: It could be said that the decline in energy sector impacted the broader NZ market on 22nd January 2025. Notably, Donald Trump's tariff strategy on Chinese imports has brought significant uncertainty to the global markets, impacting the investors’ sentiments and trade relations. These geopolitical worries might affect the dynamics of the broader NZ market over the next few months. Moving forward, Stats NZ would be releasing data about employment indicators (December 2024) on 28th January.  

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