Image Souce: Krish Capital Pty Ltd

Index Update: On 15th November 2024, S&P/NZX 50 Index closed the session in red as the index witnessed a fall of 0.06% to end the session at 12,684.880. On the other hand, S&P/NZX 20 Index increased marginally by 0.04% to 7,656.300 and S&P/NZX 10 Index rose by 0.13%. Notably, IT sector witnessed the selling pressure as S&P/NZX All Information Technology encountered a fall of 2.51% to 2,663.950. S&P/NZX All Energy witnessed a rise of 1.71%.  

Macro Update: As per the Fortnightly Economic Update dated 8th November 2024, the unemployment rose by less than expected, but the labour market still eased overall. The release also highlighted that the election of Donald Trump as the US president would be bringing policy change throughout trade, fiscal, immigration, regulatory and foreign dimensions, but the actual policies, their timing, and interaction are unclear. However, prospective tariffs on imports could result in material downside risk to global growth. 

Top Market Movers: Among top gainers, Asset Plus Limited (NZX: APL) witnessed a rise of 11.90% to end the session at $0.235 per share. On the other hand, Pacific Edge Limited (NZX: PEB) declined by 10.71% to $0.125 per share. 

Commodity Update:  The U.S. dollar was poised for strong weekly gains on Friday, nearing one-year highs as hawkish remarks from Fed Chair Jerome Powell pushed short-term Treasury yields higher. Powell signaled that there’s no need to rush rate cuts, citing solid economic growth, a strong job market, and inflation still above the 2% target, which tempered expectations for a rate cut next month. In commodities, gold rose 0.06% to $2,574.30 per ounce, silver gained 0.13% to $30.61, and copper increased 0.44% to $9,071 per ton. Brent crude slipped 0.41% to $72.26, weighed down by oversupply and demand concerns.  

A graph showing different types of stock Description automatically generated with medium confidence

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. While currently experiencing a minor pullback, the index continues to form higher highs and higher lows, reinforcing the ongoing uptrend. Furthermore, the 14-day Relative Strength Index (RSI) is trading near its midpoint, indicating a neutral market sentiment in the short-term. 

Our Stance: It could be said that the broader NZ market is being influenced by some uncertainty in the global markets. Globally, the higher U.S. producer prices hint at persistent inflationary pressures, which might impact the market sentiments. Moreover, China’s recently announced stimulus package witnessed mixed reactions from the market players. Moving forward, the monetary policy statement, which would be released by RBNZ on 27th November 2024, might provide some insights about the global and NZ economy. 

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