NZ Market Ends On a Flat Note

Index Update: On 23rd December, the broader NZ market closed on a flat note as S&P/NZX 50 Index witnessed a marginal rise of 0.07% to end at 13,517.730 and S&P/NZX 20 Index increased slightly by 0.02% to close at 7,692.150. On the same day, S&P/NZX 10 Index declined marginally by 0.05% to 12,892.930. Notably, financials sector encountered some buying momentum, and S&P/NZX All Financials witnessed an increase of 1.45% to end at 1,635.030.     

Macro Update: As per FEU dated 19th December, the economic growth remained strong throughout sectors as global tensions ease as well as rates decline. Furthermore, the global central banks have been moving towards neutral policy stances as worries related to persistently high inflation subside. While the risks of labour market weakness could induce further easing in the US, in Australia, the labour market tightness as well as an increase in inflation can prompt an increase in rate.   

Market Movers: Among top gainers, Minerals Exploration Limited (NZX: MEX) witnessed an increase of 17.95% to end at $0.23 per share. On the other hand, T&G Global Limited (NZX: TGG) declined by 5.11% to $2.23 per share.   

Commodity Update: The Japanese yen strengthened on Tuesday amid broad U.S. dollar weakness after authorities issued their strongest warning yet, signalling Tokyo’s readiness to intervene as the currency hovered near recent lows against major peers. Commodities advanced, with gold rising 1.17% to USD 4,521.65, silver up 1.85% to USD 69.77, and copper edging 0.04% higher to USD 11,925.00. Brent crude slipped 0.10% to USD 61.98 after sharp prior-session gains.  

Source: Trading View, Analysis: Kalkine Group  

After completing a pullback that successfully tested a major support area aligned with the 2024 peak, the S&P/NZX 50 Index continued its recovery for a third straight session, edging up 9.42 points, or 0.07%, to finish at 13,488.28. While the index is still undergoing a retracement from its record high, it remains firmly positioned above a critical support zone linked to the 2024 high. Technically, the near-term structure stays constructive, underpinned by a consistent pattern of higher highs and higher lows, with prices holding comfortably above key technical levels. Provided this primary support zone remains intact, the broader uptrend that began in October 2023 is expected to remain in force. Initial support is seen around 13,270, and sustained trading above this level is essential to maintain bullish momentum and enable another attempt at the all-time high. Conversely, a decisive break below 13,270 would signal a deeper correction, potentially paving the way for a pullback toward the 13,000 area before the dominant uptrend resumes.  

Our Stance: While the easing trade tensions between the US-China as well as probability related to the rate cuts by the US Fed would continue to influence the broader market sentiments, the investors are required to focus on other macroeconomic indicators, including GDP numbers. As per the FEU (fortnightly economic update), the global economic growth consistently surprised on the upside this year even though there were US tariffs and geopolitical worries.