Image Souce: Krish Capital Pty Ltd

Index Update: On 30th October 2024, the broader NZ market closed lower amidst decline in the financials sector. On the same day, S&P/NZX 50 Index witnessed a decline of 0.69% to end the session at 12,694.840 and S&P/NZX 20 Index fell by 0.60% to 7,687.870. Also, S&P/NZX 10 Index witnessed a fall of 0.83%. S&P/NZX All Financials declined by 1.77% to 1,647.840. However, S&P/NZX All Utilities increased by 0.87% to 3,500.510.  

Macro Update: As per the fortnightly economic update dated 25th October 2024, inflation eased more than anticipated amidst soft domestic activity. Also, elevated mortgage rates as well as easing net migration are keeping house price growth subdued through the September quarter. According to the Real Estate Institute of New Zealand (REINZ) release, house prices increased 0.2% in the September month but fell ~1% in the quarter overall.  

Top Market Movers: Among top gainers, Promisia Healthcare Limited (NZX: PHL) witnessed a rise of 12.77% to end the session at NZ$0.53 per share and Scott Technology Limited (NZX: SCT) rose by 11.44% to NZ$2.24 per share. On the other hand, Ventia Services Group Limited (NZX: VNT) declined by 6.80% to NZ$4.80 per share. 

Commodity Update: On Wednesday, the dollar remained close to a three-month high as significant macroeconomic data emerged, influencing U.S. monetary policy. Gold prices surged to a record $2,790.65 per ounce, reflecting increased safe-haven demand amid rising political uncertainty in the U.S. and Japan, particularly with the presidential election approaching on November 5. Japan's Liberal Democratic Party's recent loss of parliamentary majority added to the turmoil. In commodity markets, silver fell to $34.37 and copper dropped to $9,542.00 per ton. Brent crude futures rose 0.3% to $71.33 a barrel, supported by unexpected declines in U.S. crude and gasoline inventories. 

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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 towards its historical peak from 2021. While currently experiencing a minor pullback, the index continues to form higher highs and higher lows, reinforcing the ongoing uptrend. Furthermore, the 14-day Relative Strength Index (RSI) is hovering near its midpoint, signaling neutral market sentiment in the short term. 

Our Stance: It could be said that the broader NZ market was impacted by the decline in the financial sector. The investors are required to watch the macro-economic data points carefully as these indicators will give idea about the health of broader US economy and critical information which might influence the US Fed’s decisions on interest rates. Moreover, the global markets will also be influenced by the earning reports.  

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