NZ Market Ends in Green

Image Source: Krish Capital Pty Ltd

Index Update: On 23^rd December 2024, the broader NZ market closed the session higher amidst buying in the utilities sector. On the same day, S&P/NZX 50 Index witnessed a rise of 0.65% to end the session at 12,988.030 and S&P/NZX 20 Index rose by 0.63% to 7,804.590. Also, S&P/NZX 10 Index increased by 0.67% to 13,259.410. S&P/NZX All Utilities encountered a rise of 1.41% close the session at 3,509.030. However, S&P/NZX All Information Technology encountered a fall of 0.25%.

Macro Update: As per FEU dated 20^th December, the economic downturn is significantly deeper than most expected. Real GDP declined a combined 2.1% over the June and September quarter, marking the largest consecutive quarterly fall since the early 1990s. However, global growth is projected to remain steady in 2025 and 2026 according to the OECD’s December Economic Outlook

Top Market Movers: Among top gainers, Blis Technologies Limited (NZX: BLT) rose by 6.67%. On the other hand, Rua Bioscience Limited (NZX: RUA) declined by 9.09%

Commodity Update: The dollar remained steady on Monday following a modest rise in U.S. inflation last month, easing concerns about the speed of upcoming rate cuts. Investor confidence increased after U.S. lawmakers passed a spending bill, avoiding a government shutdown. In the commodities market, gold dipped 0.14% to $2,641.40, while silver surged 0.88% to $30.22. Copper rose 0.40% to $8,991.50, and Brent crude climbed 0.40% to $73.20 per barrel. The positive economic data on inflation sparked hopes of further policy easing next year, boosting global growth prospects and supporting oil demand.

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. Additionally, following a correction which formed a higher high, the index is bouncing off a short-term upward trendline established since June 2024, further confirming the prevailing uptrend. Meanwhile, the 14-day Relative Strength Index (RSI) remains above its midpoint, reflecting positive short-term market sentiment.

Our Stance: It could be said that significant buying in the buying in the utilities sector supported the NZ market. The cooler-than-expected US inflation data revived anticipations for the further policy easing by the US Federal Reserve. However, after the recent commentary from the US Fed, the market players were expecting that the US Fed might not reduce rates as per the expectations. Amidst such uncertainty, market players are required to take a cautious approach.