Image Source : Krish Capital Pty Ltd

Index Update: On 7th May 2025, the broader NZ market ended higher amidst overall buying momentum. On the same day, S&P/NZX 50 Index witnessed a rise of 0.61% to end the session at 12,496.890 and S&P/NZX 20 Index rose by 0.52% to 7,409.810. Also, S&P/NZX 10 Index increased by 0.62% to end the trading session at 12,431.090. Notably, significant buying was witnessed in the materials sector. S&P/NZX All Materials encountered a rise of 1.69% to 1,081.460.    

Macro Update: The seasonally adjusted unemployment rate stood at 5.1% in the March 2025 quarter, remaining unchanged from the previous quarter, as per Stats NZ. In the March 2025 quarter, the employment rate stood at 67.2%, while annual wage inflation was 2.9%. Notably, average ordinary time hourly earnings amounted to $42.79.  

Top Market Movers: Among top gainers, Manawa Energy Limited (NZX: MNW) witnessed a rise of 27.63% to end at $6.19 per share. On the other hand, Metro Performance Glass Limited (NZX: MPG) declined by 7.55% to $0.049 per share.   

Commodity Update: The dollar held steady ahead of the Federal Reserve's policy meeting, with Chair Jerome Powell expected to call for more data before any decision. Asian investors continued pulling out U.S. assets, while upcoming U.S.-China trade talks calmed market fears. Gold slipped 0.68% to $3,399.60, silver fell 0.35%, and copper dropped 0.73%. Brent crude rose 0.60% to $60.52 on signs of weaker U.S. output and stronger global demand. 

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Source: Trading View, Analysis: Kalkine Group   

After undergoing a correction, the S&P/NZX 50 broke above its previous peak of 12,400 points and crossed the 50-day simple moving average, a key trend-following indicator - suggesting a potential recovery is underway. Additionally, the 14-day Relative Strength Index (RSI) is rising above the midpoint, lending further support to this outlook. If this momentum continues, the index may approach the upward trendline that has been in place since October 2023, near the 12,750-point level, which could influence its next direction.  

Our Stance: It could be said that the buying in materials sector somewhat supported the broader NZ market on 7th May 2025. As of now, the capital markets might get impacted by the volatility in global commodity market and uncertain macro-economic environment. Furthermore, it is important to wait for clarity regarding inflation trends as well as central bank policy. While the broader markets would continue to be impacted by the inflation and trade-related news, other macroeconomic releases might also influence the broader markets. On 8th May, data about initial jobless claims is expected to be released. 

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