Image Source : Krish Capital Pty Ltd

Index Update: On 12th February 2025, the broader NZ market ended the trading session in red amidst selling in the energy sector. On the same day, S&P/NZX 50 Index witnessed a decline of 0.03% to end at 12,913.950 and S&P/NZX 20 Index fell by 0.16%. S&P/NZX 10 Index fell by 0.39%. Notably, S&P/NZX All Energy encountered a fall of 2.03%. However, S&P/NZX All Materials rose by 1.20%.  

Macro Update: As per the FEU dated 7th February 2025, the key development in the domestic economy was the labour market data confirming the further deterioration in conditions in late-2024. Heading into 2025, the business sentiment is subdued due to soft domestic demand, although businesses anticipate trading conditions to improve as monetary policy eases. Also, the robust goods exports continue to provide some offset to soft domestic demand. 

Top Market Movers: Among top gainers, WasteCo Group Limited (NZX: WCO) witnessed a rise of 5.00% to end the session at $0.021 per share. On the other hand, ikeGPS Group Limited (NZX: IKE) declined by 4.88% to $0.78 per share. 

Commodity Update: On Wednesday, the dollar retreated from its tariff-driven rally, dropping below recent highs as traders awaited U.S. inflation data and updates on the trade front. Federal Reserve Chair Jerome Powell maintained that the Fed was not in a rush to cut interest rates during his testimony to Congress. Commodities had mixed performances: gold fell by 0.51% to $2917.40, silver slipped 0.11% to $32.28, while copper rose 0.14% to $9,374.70. Brent oil dropped 0.47% to $76.64, impacted by a rise in U.S. crude stockpiles and ongoing tariff concerns. Investors are focusing on the upcoming CPI report for insights into future rate decisions.  

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. Despite the ongoing correction, the index continues to establish higher highs and higher lows, confirming the prevailing uptrend. Meanwhile, the 14-day Relative Strength Index (RSI) is trading near its midpoint, reflecting neutral market sentiment in the short-term.  

Our Stance: It could be said that selling in the energy sector impacted the broader NZ market on 12th February. As of now, there is some uncertainty due to mixed commodity performance and the U.S. dollar’s retreat. That being said, the broader market sentiment remains positive. Furthermore, market experts believe that there can be some pricing pressures as a result of the Trump Administration’s policies, mainly tariffs. Collectively, these factors might influence the performance of global markets.  

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