Image Souce: Krish Capital Pty Ltd

Index Update: On 5th December 2024, S&P/NZX 20 Index ended the session marginally lower as the index declined by 0.06% to end the session at 7,754.520. On the same day, S&P/NZX 50 Index closed the day at 12,896.950. S&P/NZX 10 Index encountered a fall of 0.47% to 13,103.450. Consumer discretionary sector witnessed significant buying and S&P/NZX All Consumer Discretionary rose by 2.27% to 772.300. However, S&P/NZX All Health Care witnessed a fall of 1.35%.  

Macro Update: The seasonally adjusted volume of building work in New Zealand amounted to $7.8 Bn in the September 2024 quarter, down by 3.2% as compared with the June 2024 quarter, as per Stats NZ. The residential building work declined 3.5% to $4.8 Bn and non-residential building work fell 2.8% to $2.9 Bn over the same period. The quarterly residential building activity reached its lowest level in 4 years, in seasonally adjusted terms. The value of building work put in place was $35 Bn in the year ended September 2024, down by 2.6% from the year ended September 2023. 

Top Market Movers: Among top gainers, Metro Performance Glass Limited (NZX: MPG) witnessed a rise of 10.00% to $0.055 per share. On the other hand, General Capital Limited (NZX: GEN) declined by 6.90% to $0.27 per share. 

Commodity Update: The euro edged up against the U.S. dollar on Wednesday but retreated from session highs after the French government faced a no-confidence vote, signalling potential collapse. Meanwhile, U.S. Federal Reserve Chair Jerome Powell stated that the economy is stronger than expected in September, signalling support for a slower pace of interest-rate cuts. In commodities, gold slipped 0.18% to $2,671.60, silver fell 0.42% to $31.77, and copper decreased 0.20% to $9,087.50. Brent crude rose 0.20% to $72.43 per barrel, with investors awaiting OPEC+ decisions on supply cuts and monitoring Middle East tensions. 

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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. Moreover, since the break-out, the index has been forming higher highs and higher lows, reinforcing the ongoing uptrend. Furthermore, the 14-day Relative Strength Index (RSI) is trading above its midpoint, indicating positive short-term market sentiment. 

 
Our Stance: It could be said that the broader NZ market was influenced by the decline in healthcare sector. From the macro-economic perspective, the US Fed Chair said that the broader economy appears to be better now. This means that apex bank can now take a more cautious approach when it comes to reducing the rates. While the global markets continue to show mixed signals, the investors are required to take a cautious stance when it comes to investments.  

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