Image Souce: Krish Capital Pty Ltd

Index Update: On 13th December 2024, the broader NZ market closed higher and S&P/NZX 10 Index witnessed a rise of 0.86% to end the session at 12,957.980. On the same day, significant buying was encountered in the healthcare sector and S&P/NZX All Health Care witnessed a rise of 0.79% to close at 3,229.300. However, materials sector witnessed a sell-off and S&P/NZX All Materials declined by 1.73%.  

Macro Update: Stats NZ released data about international migration (October 2024). It was mentioned that the 131,100 migrant departures in the October 2024 year are, provisionally, the highest on record for an annual period. Notably, annual migrant arrivals provisionally peaked at 235,100 in the year ended October 2023. Also, the provisional net migration gain of 38,800 in the October 2024 year was made up of a net gain of 91,700 non-New Zealand citizens and a net migration loss of 53,000 New Zealand citizens. 

Top Market Movers: Among top gainers, Cooks Coffee Company Limited (NZX: CCC) witnessed a rise of 9.09% to end the session at $0.30 per share. On the other hand, AoFrio Limited (NZX: AOF) declined by 9.09% to $0.10 per share. 

Commodity Update: The dollar rose to a 2.5-week high on Friday, set for its best week in a month, amid expectations the Federal Reserve will cut interest rates next week but take a patient approach to further reductions. Soft U.S. producer price data, despite a high headline figure, reinforced bets for a rate cut on December 18, while rising unemployment claims indicated a cooling job market. In commodities, gold fell 0.02% to $2,708.80, silver dropped 0.42% to $31.42, and copper gained 0.12% to $9,096.50. Oil prices were subdued, with Brent crude edging down 0.01% to $73.34 per barrel, driven by expectations of a supply surplus in 2025. However, losses were capped by optimism surrounding fresh stimulus measures from China to boost its sluggish economy. 

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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. Moreover, since the break-out, the index has been forming higher highs and higher lows, reinforcing the ongoing uptrend. Furthermore, the 14-day Relative Strength Index (RSI) is trading near its midpoint, indicating neutral market sentiment in the short-term. 

 
Our Stance: It could be said that the broader NZ market was supported by buying in the healthcare sector. As per US Bureau of Labor Statistics, the Producer Price Index for final demand increased 0.4% in November, seasonally adjusted. Also, final demand prices rose 0.3% in October and 0.2% in September. While there are still uncertainties about the economic policies, JP Morgan's optimistic outlook for 2025 provides some resilience. Despite challenges related to global growth, Trump’s win bodes decent outlook for risky assets. Moving forward, the Federal Reserve decision about the interest rates might affect the performance of NZ equities. 

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