Broader NZ Market Ends in Green Amidst Buying in Utilities Sector

Image Source : Krish Capital Pty Ltd

Index Update: On 12th May 2025, the NZ market was supported by the buying witnessed in the utilities sector. On the same day, S&P/NZX 50 Index witnessed a rise of 0.57% to end the session at 12,676.750 and S&P/NZX 20 Index increased by 0.66% to close at 7,521.190. Also, S&P/NZX 10 Index rose by 0.45% to close the session at 12,555.020. Notably, significant buying was encountered in the utilities sector and S&P/NZX All Utilities increased by 2.02%.   

Macro Update: Recently, RBNZ released financial stability report (May 2025). As per the release, despite the reduced interest rates, household as well as business credit demand is soft. Notably, household borrowers remained resilient to increased debt-servicing costs. Also, the non-performing loans remain around the peak, and these are expected to decline over the upcoming months as and when debt-servicing costs begin to decline.   

Top Market Movers: Among top gainers, Chatham Rock Phosphate Limited (NZX: CRP) witnessed a rise of 7.59% to end the session at $0.085 per share. On the other hand, WasteCo Group Limited (NZX: WCO) declined by 5.26% to $0.018 per share.   

Commodity Update: The dollar rose in early Asian trading on Monday after U.S.-China talks eased trade war fears. Gold dropped 2.03% to $3,275.60, silver slipped 0.37% to $32.79, while copper gained 0.55% to $9,500.10. Brent crude increased 0.20% to $64.09, extending last week’s rally. Investors welcomed the trade deal news but stayed cautious, awaiting more details on the agreement and developments in global geopolitical tensions. 

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. Currently, the index is approaching the upward trendline that has been in place since October 2023, near the 12,750-point level, which could influence its next direction. A decisive break above this trendline could pave the way for further gains, with the next major resistance located around the previous high near 13,250 points. However, failure to breach this level may signal a continuation of the recent consolidation phase.   

Our Stance: It could be said that the significant buying in the utilities sector somewhat supported the broader NZ market on 12th May 2025. As of now, the broader global and NZ markets are being impacted by the news related to the tariffs. Recently, there has been a positive development on the US-China trade deal front, which can support the broader markets moving forward. For the market players, some positive news on the trade deal front provides some kind of relief.