Image Source : Krish Capital Pty Ltd

Index Update: On 3rd February 2025, the broader NZ market witnessed significant selling pressure as healthcare sector ended lower. On the same day, S&P/NZX 50 Index witnessed a decline of 1.42% to end the session at 12,810.320 and S&P/NZX 20 Index fell by 1.32% to close at 7,687.090. Also, S&P/NZX 10 Index encountered a decline of 1.92%. S&P/NZX All Health Care witnessed significant selling pressure as the index fell by 4.28%. However, S&P/NZX All Materials increased 0.60%.  

Macro Update: The cost of living for the average NZ household rose 3.0% in the 12 months to December 2024 quarter, as per Stats NZ. The 3.0% rise, measured by the household living-costs price indexes (HLPIs), follows the 3.8% growth in the 12 months to the September 2024 quarter. The most recent high was 8.2% witnessed in the 12 months to the December 2022 quarter. For many households, the interest payments on mortgages were high and continue to contribute significantly to the living costs.  

Top Market Movers: Among top gainers, New Talisman Gold Mines Limited (NZX: NTL) witnessed a rise of 23.68% to end at $0.047 per share. On the other hand, Fisher & Paykel Healthcare Corporation Limited (NZX: FPH) declined by 6.65% to $35.10 per share. 

Commodity Update: The U.S. dollar surged Monday, driving the Canadian dollar and Mexican peso to multi-year lows. At the same time, China’s yuan hit a record low in offshore trading after President Trump’s trade war intensification. The dollar’s strength was widespread, with the euro falling to a two-year low and the Swiss franc weakening to its lowest since May. Trump imposed 25% tariffs on Canada and Mexico, and 10% on China, citing illegal immigration and the drug trade as key reasons. In commodity markets, gold fell 0.94% to $2,808.10, silver dropped 1.73% to $31.71, and copper declined 1.28% to $8,932. Brent crude rose 0.80% to $76.29, amid concerns over supply disruptions. 

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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. 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 the sell-off in the healthcare sector significantly weighed over the broader NZ market. As of now, the market players are worried about the US tariffs on goods from the critical trading partners. The impact on the broader global economy and corporate profits can impact the performance of global equities. Amidst the uncertainties, the market players are required to be cautious with their equity investments. The health of the broader global economy affects the future course of the rate cuts.  

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