NZ Market Closes Higher Amidst Broad-based Buying

Index Update: On 19^th November 2024, the broader NZ market closed the session in green as materials sector witnessed buying momentum. S&P/NZX 50 Index encountered a rise of 0.40% to end the session at 12,816.320 and S&P/NZX 20 Index rose by 0.39% to 7,731.790. Also, S&P/NZX 10 Index encountered a rise of 0.63%. S&P/NZX All Materials rose by 1.81% to close the session at 1,122.290. However, S&P/NZX All Information Technology encountered a decline of 1.86%.

Macro Update: Recently, RBNZ stated that NZ banks are well-positioned to continue supporting households and businesses, which includes effectively handling any potential loan defaults. The financial institutions are well prepared to ensure that credit remains available for households and businesses. The strength of NZ’s financial system means it can weather economic uncertainties and challenges, including elevated geopolitical tensions.  

Top Market Movers: Among top gainers, Radius Residential Care Limited (NZX: RAD) witnessed a rise of 9.38% to end the session at $0.21 per share. On the other hand, Trade Window Holdings Limited (NZX: TWL) declined by 6.38%.

Commodity Update:  On Tuesday, U.S. bond yields and the dollar remained below multi-month highs as traders awaited further details on President-elect Donald Trump's cabinet selections and analyzed the outlook for potential Federal Reserve rate cuts. In the commodities market, gold rose 0.57% to $2,628.60, silver gained 0.83% to $31.48, and copper climbed 0.08% to $9,104 per ton. Brent crude slipped 0.1% to $73.37 per barrel, following a rally fueled by halted production at Norway's Johan Sverdrup oilfield. Investor caution lingered, driven by concerns over the ongoing Russia-Ukraine conflict and its potential escalation.

Our Stance: It could be said that the broader NZ market was helped by the buying in materials sector. Moving forward, the global markets are expected to be affected by the earnings releases from the retailers as the holiday season will be commencing. The momentum in global markets might also influence the NZ equities. On 25^th November, Stats NZ would be releasing data about retail trade survey (September 2024 quarter).

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. While currently experiencing a minor pullback, the index continues to form higher highs and higher lows, reinforcing the ongoing uptrend. Furthermore, the 14-day Relative Strength Index (RSI) is heading north from its midpoint, indicating a positive short-term market sentiment.