Image Source : Krish Capital Pty Ltd

Index Update: On 28th January 2025, the broader NZ market ended in red amidst decline in the financials sector. On the same day, S&P/NZX 50 Index witnessed a decline of 0.33% to end the session at 12,957.150 and S&P/NZX 20 Index fell by 0.35% to 7,762.530. Also, S&P/NZX All Financials encountered a decline of 2.49% to close at 1,496.720. However, S&P/NZX All Information Technology encountered a rise of 1.67% to end at 2,993.450.  

Macro Update: As per Fortnightly Economic Update dated 24 January 2025, the economic indicators continue to point out about the activity stabilizing through late-2024 and picking up over 2025. Also, business confidence perked up in the quarter ended December. As per NZIER’s Quarterly Survey of Business Opinion (QSBO), there are now more firms who are anticipating conditions to improve over the year ahead. Also, with the improvement in confidence, employment continues to show signs of stabilizing.  

Top Market Movers: Among top gainers, New Talisman Gold Mines Limited (NZX: NTL) witnessed a rise of 17.86% to end the session at $0.033 per share. On the other hand, Santana Minerals Limited (NZX: SMI) declined by 16.94% to $0.515 per share. 

Commodity Update: The Japanese yen lost some safe-haven gains as investors reacted to the potential impact of China's DeepSeek, an open-source AI model using cost-effective chips and data. The euro weakened amid fresh tariff threats, while the U.S. dollar stabilized after a sharp drop due to market turbulence. In commodities, gold rose by 0.17% to $2,770.90, silver held steady at $30.45, and copper fell by 0.47% to $9,052.00. Brent crude saw a slight increase of 0.20%, reaching $77.20 per barrel, despite weak Chinese economic data and softer global demand outlooks. Markets are also awaiting the Fed's interest rate and GDP updates this week. 

 

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 trading near its midpoint, reflecting neutral market sentiment in the short-term.  

Our Stance: It could be said that the US Federal Reserve meeting is one of the most important events in the current week, which can affect the broader equity markets. Since there are mixed market conditions, the market players are required to maintain a cautious stance amidst uncertainty pertaining to Trump’s policies and potential tariffs. These factors are likely to affect the global and NZ markets in the coming months. On 30th January 2025, Stats NZ would be releasing data about overseas merchandise trade (December 2024).  

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