Image Source : Krish Capital Pty Ltd

Index Update: On 21st January 2025, the broader NZ market ended in red amidst decline in the healthcare sector. On the same day, S&P/NZX 50 Index and S&P/NZX 20 Index witnessed a fall of 0.27% and 0.34%, respectively. Also, S&P/NZX 10 Index encountered a fall of 0.48%. S&P/NZX All Health Care declined by  1.10% to close the session at 3,322.760. However, materials sector witnessed significant buying and S&P/NZX All Materials rose by 5.00%.  

Macro Update: Stats NZ released data about electronic card transactions (December 2024). For December 2024, the spending in the retail industries rose 2.0% (or $130 Mn) and spending in the core retail industries increased 1.8% ($103 Mn) as compared with November 2024. With respect to the retail spending category, durables were up by $57 Mn (or 3.7%), consumables increased $36 Mn (or 1.4%) and fuel was up $19 Mn (or 3.8%). The non-retail (excluding services) category rose by $22 Mn (or 1.0%) from November 2024. 

Top Market Movers: Among top gainers, Vulcan Steel Limited (NZX: VSL) witnessed a rise of 6.87% to end at $8.25 per share. On the other hand, Burger Fuel Group Limited (NZX: BFG) declined by 7.59% to $0.365 per share. 

Commodity Update: The U.S. dollar rebounded in volatile Asian trading on Tuesday after President Donald Trump hinted at potential tariffs on Canada and Mexico, though specifics were unclear. In commodities, gold rose by 0.30% to $2,740.00, silver gained 0.69% to $31.36, and copper saw a slight dip of 0.02% to $9,266.00. Brent crude dropped 0.10% to $80.60 per barrel following Trump’s declaration of a national emergency to bolster U.S. energy production. However, crude losses were limited by dollar weakness and expectations of new U.S. sanctions on Venezuela, which could further tighten the global oil supply. 

A graph of stock market

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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 heading north from its midpoint, reflecting positive market sentiment in the short-term.  

Our Stance: It could be said that the selling momentum in the healthcare sector impacted the NZ market on 21st January. As of now, the investors are required to be cautious as the global markets remain sensitive to political developments as well as macroeconomic trends. The market players seem to be waiting for the US Federal Reserve meeting, which is expected to take place on 28 – 29 January 2025. The meeting can provide the outlook for the rate cuts which can influence the investors’ sentiments.  

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