Image Source : Krish Capital Pty Ltd

Index Update: On 24th January 2025, the broader NZ market closed lower amidst decline in the materials sector. On the same day, S&P/NZX 50 Index witnessed a decline of 0.27% to end at 13,024.700 and S&P/NZX 20 Index fell by 0.18% to 7,813.130. Also, S&P/NZX 10 Index encountered a fall of 0.33% to 13,319.990. S&P/NZX All Materials witnessed a fall of 2.78% to close the session at 1,049.020. However, S&P/NZX All Industrials increased by 0.83%.  

Macro Update: As per Situation and Outlook for Primary Industries (SOPI) December 2024, the export revenue for meat and wool is expected to increase slightly to $11.4 Bn in the year ended 30 June 2025 with rising prices offsetting declines in export volumes. The higher prices are being driven by tighter global beef and mutton supplies and strong demand from Europe and the US. The export prices for beef and sheepmeat are expected to improve in 2024/25 and over the long run.  

Top Market Movers: Among top gainers, Synlait Milk Limited (NZX: SML) witnessed a rise of 19.05% to end at $0.50 per share. On the other hand, WasteCo Group Limited (NZX: WCO) declined by 9.09%.  

Commodity Update: On Friday, the yen dominated currency markets ahead of the Bank of Japan's (BOJ) anticipated interest rate hike, with a 25-basis-point increase widely expected. The U.S. dollar was set for its worst week in two months. In commodities, gold rose 0.34% to $2,775.50, silver gained 1.35% to $31.26, and copper increased by 0.42% to $9,282.50. However, Brent crude experienced a slight drop of 0.50%, settling at $77.95, following pressure from U.S. President Donald Trump on OPEC and Saudi Arabia to reduce prices and boost oil production. The BOJ's policy decision remains a key focus. 

A graph of stock market

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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 above its midpoint, reflecting positive market sentiment in the short-term.  

Our Stance: It could be said that the decline in the materials sector impacted the broader NZ market on 24th January 2025. The mixed macroeconomic data reflects the ongoing challenges, suggesting a cautiously optimistic outlook over the next few months. In the week ending January 18, the advance figure for seasonally adjusted initial claims stood at 223,000, an increase of 6,000 from the previous week's unrevised level of 217,000. Moving forward, macroeconomic data points and earnings from key companies are expected to affect the broader US markets.  

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