Image Source : Krish Capital Pty Ltd

Index Update: On 12th December 2024, the broader NZ market ended lower amidst decline in the healthcare sector. On the same day, S&P/NZX 50 Index witnessed a fall of 0.54% to end the session at 12,692.720 and S&P/NZX 20 Index declined by 0.65% to close at 7,617.510. Also, S&P/NZX 10 Index fell by 0.82%. However, communications services sector witnessed significant buying and S&P/NZX All Communications Services increased by 2.01%.  

Macro Update: Stats NZ released data about electronic card transactions (November 2024). For the November 2024 month, spending in the retail industries was unchanged as compared to October 2024. Over the same period, the spending in core retail industries rose 0.1% ($3.2 million). By retail spending category, hospitality was up by $17 Mn (or 1.4%), consumables increased $12 Mn (0.4%) and fuel was up by $6.2 million (or 1.3%).  

Top Market Movers: Among top gainers, Rua Bioscience Limited (NZX: RUA) witnessed a rise of 8.70% to $0.025 per share. On the other hand, Metro Performance Glass Limited (NZX: MPG) declined by 6.67% to $0.056 per share. 

Commodity Update: The U.S. dollar traded in a narrow range on Thursday after reaching a two-week high in the previous session, supported by rising U.S. Treasury yields. Despite this, market players anticipate the Federal Reserve may cut rates next week. November’s consumer price index (CPI) showed a 0.3% increase, the largest rise since April, following four consecutive 0.2% gains. Additional inflation data will be released later with the producer price index (PPI). In commodities, gold fell 0.33% to $2,747.80 per ounce, silver dropped 0.16% to $32.92, and copper gained 0.64% to $9,236.50 per ton. Oil prices were also subdued, with Brent crude falling 0.01% to $73.47 per barrel, as weak demand forecasts and a higher-than-expected rise in U.S. gasoline and distillate inventories offset concerns over new EU sanctions on Russian oil. 

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 impacted by the decline in healthcare sector. While the US investors appear to be optimistic about risky assets after the Trump’s win, market players are required to be cautious about the broader economic outlook. This is primarily because of prevailing uncertainty regarding economic policies. Moving forward, NZ markets are expected to be influenced by the broader movement of the US equities. On 18th December, Stats NZ would be releasing data about balance of payments and international investment position (September 2024 quarter).  

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