Image Source : Krish Capital Pty Ltd

Index Update: On 13th January 2025, the broader NZ market ended in red amidst sell-off in the IT sector. On the same day, S&P/NZX 50 Index witnessed a fall of 0.53% to end the session at 12,827.330 and S&P/NZX 20 Index fell by 0.43% to 7,695.780. Also, S&P/NZX 10 Index encountered a fall of 0.37%. S&P/NZX All Information Technology witnessed a decline of 2.85% to 2,912.160. However, S&P/NZX All Materials rose by 0.12%.  

Macro Update: As per Stats NZ, there were 3,100 new homes consented in New Zealand in November 2024, up 4.8% as compared with November 2023. Out of these, there were 1,402 stand-alone houses consented, down 4.1% as compared to November 2023, and 1,698 multi-unit homes consented, up 14% over the same period. While the number of homes consented each month witnessed fluctuations, the trend has remained relatively steady for the last year.  

Top Market Movers: Among top gainers, Savor Limited (NZX: SVR) witnessed a rise of 11.36% to end the session at $0.245 per share. On the other hand, Pacific Edge Limited (NZX: PEB) witnessed a fall of 55.22%. 

Commodity Update: The U.S. dollar surged at the start of the week, bolstered by a strong jobs report highlighting the nation's economic resilience. U.S. job growth accelerated in December, with the unemployment rate dropping to 4.1%, prompting traders to scale back expectations for Federal Reserve rate cuts in 2025. The dollar's strength left its peers languishing near multi-year lows. In commodities, gold inched up 0.01% to $2,715.70, while silver dropped 0.24% to $31.23. Copper gained 0.50%, reaching $9,126.50. Meanwhile, Brent crude oil climbed 1.81%, settling at $81.22 per barrel, driven by concerns over supply disruptions following the U.S.'s stringent sanctions on Russian oil exports. 

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 break-out, the index is forming higher highs and higher lows, 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 sell-off in IT sector weighed over the broader NZ market on 13th January 2025. It seems that the US markets have been influencing the investors’ sentiments. After Friday's labor market data, some analysts believe that the future rate cut expectations from the US central bank have been ruined. Amidst such uncertainty, investors are required to take a balanced approach for their investments. The impact of global markets are expected to be felt on NZ markets as well.  

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