Image Souce: Krish Capital Pty Ltd

Index Update: On 5th November 2024, the broader NZ market ended in green amidst robust buying in the utilities sector. On the same day, S&P/NZX 50 Index witnessed a rise of 0.54% to end the session at 12,658.300 and S&P/NZX 20 Index increased by 0.63% to 7,648.230. Also, S&P/NZX 10 Index rose by 0.84%. S&P/NZX All Utilities encountered an increase of 1.76% to 3,490.440. However, S&P/NZX All Energy declined by 1.69%.

Macro Update: The cost of living for the average New Zealand household rose 3.8% in the 12 months to the September 2024 quarter, as per Stats NZ. This increase, measured by the household living-costs price indexes (HLPIs), follows the 5.4% rise in the 12 months to the June 2024 quarter. Meanwhile, inflation – as measured by the consumers price index – stood at 2.2% in the 12 months ended September 2024 quarter, following the 3.3% increase in the 12 months to the June 2024 quarter.

Top Market Movers: Among top gainers, Green Cross Health Limited (NZX: GXH) witnessed a rise of 3.90% to end the session at NZ$0.800 per share and Synlait Milk Limited (NZX: SML) increased by 3.85% to $0.405 per share. On the other hand, AFT Pharmaceuticals Ltd (NZX: AFT) declined by 4.55% to $2.73 per share.

Commodity Update: The U.S. dollar started Tuesday on the back foot as traders adjusted positions ahead of the U.S. presidential election, following polls that weakened bets on a Republican win by Donald Trump. In commodities, gold and silver declined, with gold dropping 0.46% to $2,734.50/oz and silver falling 0.59% to $32.42. Meanwhile, copper rose 0.54% to $9,734.50/ton. Brent crude eased 0.2% to $74.93/barrel after a recent rally, as investors awaited election results and a key political meeting in China for further market direction. Oil surged Monday after OPEC+ postponed production increases, tightening the supply outlook. All eyes are now on the election and the upcoming FOMC rate decision for more clarity on market trends.

 

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 oscillating between 40 and 60, indicating a neutral short-term market sentiment.

Our Stance: It could be said that the broader NZ market was aided by the buying witnessed in the utilities sector. Recently, the October jobs report released in the US provided some hints that the US Fed might continue to cut the interest rates. Moreover, a cautious stance is advised amidst the corporate earnings schedule and the US Fed meeting. On 4th November 2024, NASDAQ Composite Index declined by 0.33% to 18,179.98.

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