Image Source : Krish Capital Pty Ltd

Index Update: On 5th February 2025, the broader NZ market closed in red amidst sell-off in the healthcare sector. On the same day, S&P/NZX 50 Index witnessed a decline of 0.47% to end the session at 12,844.590 and S&P/NZX 20 Index fell by 0.54% to 7,700.180. Also, S&P/NZX 10 Index encountered a fall of 1.04%. S&P/NZX All Health Care witnessed a decline of 2.24% to close at 3,177.440. However, S&P/NZX All Energy rose by 1.56%.  

Macro Update: The unemployment continued to grow, with the seasonally adjusted unemployment rate touching 5.1% in the December 2024 quarter, as per Stats NZ. In the December 2024 quarter, the employment rate stood at 67.4% and annual wage inflation remained at 3.3%. Annually, unemployment increased by 33,000 to 156,000, as measured by the Household Labour Force Survey. Notably, unemployment has been increasing since late 2022. The unemployment rate in the December 2024 quarter was the highest it’s been since the quarter ended September 2020, when it was 5.2%.  

Top Market Movers: Among top gainers, Bremworth Limited (NZX: BRW) witnessed a rise of 9.09% to end at $0.60 per share. On the other hand, Move Logistics Group Ltd (NZX: MOV) declined by 8.33% to $0.22 per share. 

Commodity Update: On Wednesday, the dollar gave up some of its recent gains as investors perceived increased chances for the Federal Reserve to ease policy later this year, fueling a rally in Treasuries. In the commodities market, gold rose 0.20%, reaching $2,881.10, while silver dipped 0.59% to $32.83, and copper gained 0.05% to $9,182.20. Brent crude fell 0.24% to $76.02, as markets downplayed the impact of China's tariffs on U.S. energy imports. However, President Trump's renewed efforts to curb Iranian crude exports offered some support. Investors await U.S. Non-Farm Payroll data for clearer insights on future rate decision. 

 

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. 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 sell-off in the healthcare sector impacted the broader NZ market. Moving forward, the broader US and NZ markets are expected to be influenced by the impacts of the US-China trade war. These macro-economic uncertainties can adversely impact the broader equities. Therefore, investors are required to monitor the latest developments regarding the US-China trade war. However, the CPI data, which is scheduled for the release on 12th February, can also influence the equity markets.   

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