Broader NZ Market Ends in Green

Image Source : Krish Capital Pty Ltd

Index Update: On 25th March 2025, the broader NZ market ended higher amidst buying in the materials sector. On the same day, S&P/NZX 50 Index witnessed a rise of 0.46% to end the session at 12,184.510 and S&P/NZX 20 Index rose by 0.39% to 7,209.190. Also, S&P/NZX 10 Index encountered a rise of 0.53% to 11,949.880. Notably, significant buying was encountered in the materials sector and S&P/NZX All Materials witnessed a rise of 3.53% to 1,192.740.  

Macro Update: Recently, Treasury NZ released interim financial statements of the government of New Zealand for the 7 months ended 31 January 2025. The core crown tax revenue stood at $70.2 Bn, which was $0.6 bn (0.9%) higher than forecast with the largest variance relating to GST being $0.3 Bn (1.9%) above forecast. The operating balance before gains and losses excluding ACC was a deficit of $3.7 Bn, $1.4 Bn less than the forecast deficit.  

Top Market Movers: Among top gainers, TruScreen Group Limited (NZX: TRU) witnessed a rise of 6.90% to $0.0310 per share. On the other hand, Synlait Milk Limited (NZX: SML) declined by 12.22% to $0.79 per share. 

Commodity Update: The dollar reached a three-week high against the yen on Tuesday, bolstered by strong U.S. services data and easing trade concerns. President Trump indicated that not all of his proposed tariffs would take effect on April 2, offering potential exemptions for some countries. This fueled investor optimism, boosting the dollar and supporting Wall Street's positive mood. In commodities, gold rose slightly to $3,045.40, silver gained 0.43% to $33.49, and copper climbed to $9,965.20. Meanwhile, Brent crude remained steady at $73.05 per barrel after a recent surge, with Trump threatening tariffs on oil imports from Venezuela. 

Source: Trading View, Analysis: Kalkine Group   

In its latest trading session, the S&P/NZX 50 Index gained 56.28 points, closing at 12,184.50. However, despite this slight upward movement, the index remains below its 21-period Simple Moving Average (SMA), which now serves as a key resistance level. The inability to break above this threshold reinforces a bearish outlook, suggesting that selling pressure continues to dominate the broader market trend. This resistance level will play a crucial role in determining whether the index can regain upward momentum or extend its decline. A failure to breach this level in the near term could lead to increased selling pressure, further confirming the downward trend. On the downside, a key support level to monitor is 12,000.50, aligning with a historically significant horizontal price zone. A decisive break below this level could accelerate bearish momentum, potentially leading to further downside movement.  

Our Stance: It could be said that the buying in the materials sector somewhat supported the broader NZ market. As of now, the broader global markets are being impacted by the news related to the tariffs and other macroeconomic indicators. While there is still some uncertainty related to the trade policies, the investors are required to maintain a cautious stance when it comes to making equity investments. Furthermore, the worries related to the global trade war can impact the US Fed’s stance on interest rates and inflation.