Image Source : Krish Capital Pty Ltd

Index Update: On 17th January 2025, the broader NZ market witnessed significant buying as consumer staples sector ended higher. On the same day, S&P/NZX 50 Index witnessed an increase of 1.00% to end the session at 13,130.430 and S&P/NZX 20 Index rose by 1.09% to end at 7,893.090. Also, S&P/NZX 10 Index increased by 1.26% to 13,445.140. Also, S&P/NZX All Consumer Staples encountered a rise of 2.02% to end at 2,741.020. However, S&P/NZX All Materials witnessed a fall of 2.88%.   

Macro Update: As per Situation and Outlook for Primary Industries (SOPI) December 2024, seafood export revenue is expected to rise 3% to $2.2 Bn in the year ended 30 June 2025 because of continued high prices from sustained demand as well as tight global supply along with rebounding aquaculture production and export volumes. The report also stated that the long-term outlook for food and fibre exports remains positive. Internationally, the sector is expected to be supported by trade missions and continued relationship building in key markets.  

Top Market Movers: Among top gainers, General Capital Limited (NZX: GEN) witnessed a rise of 9.09% to end at $0.24 per share. On the other hand, Vulcan Steel Limited (NZX: VSL) declined by 4.44% to $7.75 per share. 

Commodity Update: The Japanese yen is set for its best weekly performance in over a month, as market expectations rise that the Bank of Japan will raise interest rates next week. Positive data, including strong wage growth and persistent price pressure, have fueled this outlook, with traders assigning an 80% probability of a rate hike. Meanwhile, in commodities, gold dipped 0.13% to $2,747.30, silver fell 0.34% to $31.61, and copper rose 0.30% to $9,274.50. Brent crude climbed 0.20% to $81.42 per barrel, extending its weekly gains due to supply concerns from U.S. sanctions on Russian oil producers and potential Fed rate cuts. 

 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 recent trading sessions, reinforcing the prevailing uptrend. Meanwhile, the 14-day Relative Strength Index (RSI) is heading north from its midpoint, reflecting positive market sentiment in the short-term.  

Our Stance: The robust buying in the consumer staples sector supported the broad-based momentum in the NZ market on 17 January. As per the recent data, advance estimates of US retail and food services sales for December 2024, adjusted for seasonal variation as well as holiday and trading-day differences, but not for price changes, stood at $729.2 Bn, reflecting a rise of 0.4% (±0.5 percent) from the previous month. The overall health of the global and NZ economy is expected to be influenced by the consumers’ behaviour. In the upcoming sessions, the global markets might also be affected by the earnings season. 

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