Image Source : Krish Capital Pty Ltd

Index Update: On 9th January 2025, the broader NZ market ended in red amidst significant selling in the healthcare sector. On the same day, S&P/NZX 50 Index witnessed a fall of 0.76% to end the session at 12,943.740 and S&P/NZX 20 Index declined by 0.82% to 7,769.990. Also, S&P/NZX 10 Index encountered a fall of 1.00% to 13,235.700. S&P/NZX All Health Care ended at 3,299.980, reflecting a decline of 1.45%. Also, S&P/NZX All Communications Services rose by 0.81%.   

Macro Update: As per Situation and Outlook for Primary Industries (SOPI) December 2024, the food and fibre sector made up 81.1% of NZ’s goods exports in the year ended 30 June 2024. In the year ended 30 June 2025, the export revenue is expected to rise to $56.9 Bn, an increase of 7%. Notably, the global economic environment is showing signs of improvement.  

Top Market Movers: Among top gainers, Third Age Health Services Limited (NZX: TAH) witnessed a rise of 7.66% to end the session at $2.67 per share. On the other hand, Synlait Milk Limited (NZX: SML) encountered a decline of 4.71% to $0.405 per share. 

Commodity Update: The U.S. dollar strengthened on Thursday, driven by rising Treasury yields, putting pressure on the yen, sterling, and euro, which hit multi-month lows amid fears of potential tariffs. Market attention is focused on U.S. President-elect Donald Trump's upcoming policies as he prepares to take office on January 20, with analysts expecting his economic agenda to boost growth and increase inflationary risks. In the commodities market, gold rose 0.26% to $2,679.20, silver gained 0.34% to $30.79, and copper saw a slight increase of 0.12%, reaching $9,066.50. Meanwhile, Brent crude oil slipped 0.40% to $75.88 per barrel, pressured by U.S. fuel inventory builds, although supply concerns from OPEC and Russia offered some support. Investors are awaiting U.S. payroll data to assess future Federal Reserve 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. Since the break-out, the index has formed higher highs and higher lows, reinforcing the prevailing uptrend. Meanwhile, the 14-day Relative Strength Index (RSI) is trading near its midpoint, reflecting neutral short-term market sentiment.  

Our Stance: The sell-off in the healthcare sector impacted the broader performance of NZ equities. As of now, market players are concerned that Mr. Trump’s populist agenda might impact the budget deficits. On 10th January, the US employment report is expected to be released, while on 14th January, Core PPI data would be released. The macro-economic data points are critical to assess the frequency of rate cuts in 2025. These factors are likely to impact broader NZ equities also.  

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