Image Source : Krish Capital Pty Ltd

Index Update: On 10th February 2025, the broader NZ market ended in red amidst decline in the materials sector. On the same day, S&P/NZX 50 Index witnessed a decline of 0.20% to end the session at 12,876.350 and S&P/NZX 20 Index fell by 0.14% to close at 7,728.880. Also, S&P/NZX 10 Index declined by 0.24%. Notably, S&P/NZX All Materials encountered a fall of 1.57% to close at 1,050.170. However, S&P/NZX All Energy closed the session in green as there was an increase of 1.55%.  

Macro Update: As per Fortnightly Economic Update dated 24th January 2025, forestry exports account for 11% of the total primary industry exports and are affected by the global economic trends as well as demand from key markets. In the short term, there are expectations that log export volumes would rise slightly as demand from China’s construction and housing sector improves. However, this would be dependent on the overall economic conditions as well as effectiveness of Chinese stimulus measures.  

Top Market Movers: Among top gainers, Third Age Health Services Limited (NZX: TAH) witnessed an increase of 11.11% to close at $3.0 per share. On the other hand, Black Pearl Group Limited (NZX: BPG) declined by 7.50% to end at $0.74 per share. 

Commodity Update: The U.S. dollar strengthened on Monday following President Donald Trump's announcement of a new 25% tariff on all steel and aluminium imports, putting pressure on the euro and commodity-driven currencies like the Australian and New Zealand dollars. Trump also stated he would unveil reciprocal tariffs on Tuesday or Wednesday, targeting countries that impose similar duties on the U.S. This escalation in trade tensions heightened concerns over a global trade war, with China’s retaliatory tariffs on U.S. goods taking effect Monday. In commodities, gold rose 0.41% to $2,899.30, silver fell 0.47% to $32.29, copper decreased 0.69% to $9,399.20, and Brent oil surged 0.50% to $75.06. 

Source: Trading View, Analysis: Kalkine Group  

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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. Despite the ongoing correction, the index continues to establish higher highs and higher lows, confirming the prevailing uptrend. Meanwhile, the 14-day Relative Strength Index (RSI) is trading near its midpoint, reflecting neutral market sentiment in the short-term.  

Our Stance: It could be said that the decline in the materials sector impacted the broader NZ market. Also, it seems that the macroeconomic uncertainties have been weighing over the sentiments of investors. The Trump's tariff plans continue to affect the global and NZ markets. On 7th February, the US investors were concerned about the news associated with tariffs and inflation. Moving forward, investors would be focusing towards the consumer price index data which is expected to be released on 12th February 2025.  

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