Image Source : Krish Capital Pty Ltd

Index Update: On 15th January 2025, the broader NZ market ended the trading session higher amidst buying in the industrials sector. On the same day, S&P/NZX 50 Index witnessed a rise of 0.46% to close at 12,943.570 and S&P/NZX 20 Index increased by 0.67% to 7,780.990. Also, S&P/NZX 10 Index encountered a rise of 0.43%. S&P/NZX All Industrials witnessed a rise of 1.55% to 2,294.010 and S&P/NZX All Communications Services rose by 1.50%.  

Macro Update: As per Situation and Outlook for Primary Industries (SOPI) December 2024, dairy export revenue is expected to increase 10% to $25.5 Bn in the year ended 30 June 2025. The increase is expected on the back of a drop in export revenue in 2023/24. The global dairy prices are expected to be higher in 2024/25 because of tight global supply from key dairy exporting regions like the US and the EU. 

Top Market Movers: Among top gainers, Millennium & Copthorne Hotels NZ Limited (NZX: MCK) witnessed a rise of 5.88% to end at $1.80 per share. On the other hand, Blis Technologies Limited (NZX: BLT) declined by 6.25% to $0.015 per share. 

Commodity Update: The dollar’s strong rally encountered a setback on Wednesday as traders turned cautious ahead of the U.S. consumer inflation report, leading to reluctance to take on new positions. The dollar’s decline was largely due to December’s producer price index (PPI) data, which was softer than expected, fueling optimism that inflation may ease. This raised hopes that the Federal Reserve could have more room to cut interest rates. In commodities, gold rose 0.28% to $2,689.80, while silver gained 0.28% to $30.43. Copper fell 0.34%, reaching $9,122.50. Brent crude remained steady at $79.95, holding near a four-month high. 

  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 short-term market sentiment.  

Our Stance: The strong buying in the industrials sector supported the broader NZ market on 15th January 2025. As per Bureau of Labor Statistics report, the PPI (which measures wholesale inflation) rose just 0.2% in December. Notably, core PPI remained flat. The market players are still in a dicey position with regards to the future course of interest rate cuts from the US Federal Reserve. Also, the earnings season might also influence the broader global markets to some extent.  

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