NZ Market Ends in Green

Index Update: On 18^th November 2024, the broader NZ market ended in green amidst buying in the communications services sector. On the same day, S&P/NZX 50 Index witnessed a rise of 0.63% to end the session at 12,764.650 and S&P/NZX 20 Index rose by 0.60% to 7,702.050. Also, S&P/NZX 10 Index encountered a rise of 0.46% to 13,011.190. Notably, S&P/NZX All Communications Services encountered an increase of 2.43% to close the session at 2,430.230.

Macro Update: On 18^th November, Stats NZ released data about business price indexes (September 2024 quarter). In the September 2024 quarter, output producers price index (PPI) witnessed a rise of 1.5% and input PPI increased 1.9% as compared to June 2024 quarter. Notably, farm expenses price index (FEPI) declined 0.2% and capital goods price index (CGPI) encountered an increase of 0.1%.

Top Market Movers: Among top gainers, WasteCo Group Limited (NZX: WCO) witnessed a rise of 6.67% to end the session at $0.032 per share. On the other hand, New Talisman Gold Mines Limited (NZX: NTL) encountered a decline of 18.18%.

Commodity Update:  The dollar strengthened against the yen on Monday after Japan's central bank hinted at potential policy tightening, though the timing remains uncertain. U.S. economic data is sparse this week. In commodities, gold rose 0.95% to $2,594.60, silver gained 0.83% to $30.69, and copper climbed 0.70% to $9,380 per ton. Brent crude edged up 0.3% to $71.24 amid the intensifying Russia-Ukraine conflict, though concerns over Chinese demand and a global oil surplus capped gains. Meanwhile, in a policy shift, the Biden administration has approved Ukraine’s use of U.S. weapons to strike deep within Russia, according to sources.  

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. While currently experiencing a minor pullback, the index continues to form higher highs and higher lows, reinforcing the ongoing uptrend. Furthermore, the 14-day Relative Strength Index (RSI) is trading above its midpoint, indicating positive market sentiment in the short-term.

Our Stance: It could be said that the broader NZ market was supported by the buying in the Communications Services sector. Moving forward, the market players need to be cautious amidst uncertainty regarding the policy shifts as a result of the newly appointed President. Moreover, the broader markets might get impacted due to the uncertainty about the rate cuts from the US Federal Reserve. On 25^th November, Stats NZ would be releasing data about overseas merchandise trade (October 2024).