Image Source : Krish Capital Pty Ltd

Index Update: On 29th January 2025, the broader NZ market closed higher amidst buying in the energy sector. On the same day, S&P/NZX 50 Index witnessed a rise of 0.35% to end the session at 13,003.040 and S&P/NZX 20 Index increased by 0.42% to 7,795.090. Also, S&P/NZX 10 Index witnessed a rise of 0.41%. Notably, S&P/NZX All Energy encountered a rise of 2.62% to close the session at 1,698.290. On the other hand, S&P/NZX All Consumer Staples declined by 1.44% to 2,714.660.  

Macro Update: As per the recent Fortnightly Economic Update, the Real Estate Institute of New Zealand (REINZ) House Price Index (HPI) rose by 0.2% in December, despite falling sales figures. Notably, the HPI declined 1.1% for the 2024 calendar year but might have reached a turning point, with growth being positive in the last 2 months. Notably, stabilisation in house prices would raise the incentive for buyers to consider new builds.  

Top Market Movers: Among top gainers, New Talisman Gold Mines Limited (NZX: NTL) witnessed a rise of 39.39% to end at $0.046 per share. On the other hand, RTO Limited (NZX: RTO) declined by 7.51%.  

Commodity Update: The U.S. dollar gained against the yen on Wednesday following fresh tariff threats from the Trump administration and easing concerns over a low-cost Chinese AI model. In commodities, gold increased by 0.10% to $2,797.90, silver remained at $30.85, while copper dropped by 0.31% to $8,999.50. Brent crude saw a minimal decrease of 0.01%, closing at $77.47 per barrel, as market participants weighed the potential effects of U.S. tariffs on Canadian and Mexican imports. Meanwhile, the focus shifted to upcoming updates on the Federal Reserve's interest rate decisions and U.S. GDP data later in the week. 

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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 buying in the energy sector somewhat supported the broader NZ market on 29th January 2025. The broader US market witnessed a rebound on 28th January from the sharp selloff which was witnessed earlier. Apart from the earnings reports, the market players are required to focus on the US Fed’s stance on broader economic conditions and the macro-economic factors which might impact the future rate decisions.   

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