Broader NZ Market Ends Higher

Image Source : Krish Capital Pty Ltd

Index Update: On 10th March 2025, the NZ market ended higher amidst broad-based buying momentum. On the same day, energy sector witnessed significant buying momentum and S&P/NZX All Energy increased by 2.08% to close the session at 1,698.290. Also, S&P/NZX 50 Index witnessed a rise of 0.94% to end at 12,515.970 and S&P/NZX 10 Index increased by 0.90% to 12,322.170.  

Macro Update: As per Fortnightly Economic Update dated 21 February 2025, the US inflation for January printed stronger than the market expectations, with the headline rate increasing to 3.0% from 2.9% in December as well as core inflation rising 0.4 percentage points to 3.3%. Also, the overall trend in retail spending has been rising, but like the housing market, the growth pace has been slow, as per the release. Notably, the housing market activity has been demonstrating signs of a gradual recovery.  

Top Market Movers: Among top gainers, Smartpay Holdings Limited (NZX: SPY) witnessed a rise of 8.33% to end at $0.65 per share. On the other hand, Chatham Rock Phosphate Limited (NZX: CRP) declined by 7.14%.  

Commodity Update: The dollar started Monday weak after significant losses last week, driven by concerns over a potentially weakening U.S. labour market and global trade tensions. U.S. President Trump's tariffs on top trading partners, though delayed for a month, added to fears of a slowing U.S. economy. Investors turned to safe-haven assets like the yen and Swiss franc. In commodities, gold rose 0.18% to $2,919.50, silver increased 0.26% to $32.89, and copper dipped 0.07% to $9,577.80. Brent crude dropped 0.40% to $70.10 due to weak inflation data from China and uncertainties surrounding U.S. trade tariffs.  

Source: Trading View, Analysis: Kalkine Group   

In July 2024, the S&P/NZX 50 index broke above both the neckline of a Head and Shoulders pattern on the daily chart and a crucial resistance level set by its 2023 high. This breakout suggests that the uptrend, which began in November 2023, is likely to continue and may drive the index toward its 2021 historical peak. Despite the ongoing correction, the index is bouncing back above the key support level defined by the 2023 high and the pattern’s neckline, reinforcing expectations of a sustained uptrend. Additionally, the 14-day Relative Strength Index (RSI) is heading north from its oversold territory, signaling a potential rebound in the near future.  

Our Stance: Moving forward, the global markets are expected to be affected by the several macro-economic releases which are aligned. On 12th March, Consumer price index data is expected to be released and, on 13th March, data about initial jobless claims will be released. These data points can provide some ideas about consumer behaviour. The market players need to assess the macro-economic datapoints as these can result in market volatility amidst trade policy uncertainties.