Image Source : Krish Capital Pty Ltd

Index Update: On 11th February 2025, the broader NZ market closed the session in green amidst buying in the materials sector. On the same day, S&P/NZX 50 Index witnessed a rise of 0.32% to end the session at 12,917.450 and S&P/NZX 20 Index increased by 0.37% to close at 7,757.830. Also, S&P/NZX 10 Index rose by 0.46%. Notably, S&P/NZX All Materials encountered an increase of 3.58% to end at 1,087.810. However, S&P/NZX All Information Technology fell by 1.80%.  

Macro Update: Recently, Reserve Bank Chief Economist Paul Conway discussed NZ’s longer-term ‘potential output’ and its significance for monetary policy. It was mentioned that, in the absence of future shocks, the economic activity in NZ would tend towards the level of potential output, as pandemic-related disruptions fade. Also, without future shocks, the OCR would tend towards the neutral interest rate.  

Top Market Movers: Among top gainers, Move Logistics Group Ltd (NZX: MOV) witnessed a rise of 9.09% to close at $0.24 per share. On the other hand, Greenfern Industries Limited (NZX: GFI) encountered a fall of 8.33% to end at $0.022 per share. 

Commodity Update: Gold prices surged to a record high of $2,949.30, gaining 0.47% as investors reacted to U.S. President Donald Trump's decision to raise tariffs on metal imports. The dollar remained firm, bolstered by this move, contributing to market unease over escalating trade tensions. Trump increased steel and aluminium tariffs to 25%, positively impacting U.S. steelmaker stocks. A 10% tariff on Chinese imports took effect earlier, and China retaliated with duties on U.S. energy and goods. Meanwhile, commodities saw mixed results: silver dropped 0.43% to $32.35, copper fell 0.66% to $9,405.20, and Brent oil climbed 0.40% to $76.14. 

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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. 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 buying in the materials sector supported the broader NZ market on 11th February 2025. As of now, Trump administration plans to impose reciprocal tariffs on any country taxing the US imports. While broader markets are being affected by the earnings season, it could be said that the macro-economic uncertainties might weigh over the investors’ sentiments. However, the economic indicators are required to be assessed carefully in order to get an idea about the future rate cuts.

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