Broader NZ Market Ends in Red Amidst Sell-off in Consumer Staples Sector

Image Source : Krish Capital Pty Ltd

Index Update: On 3rd June 2025, the broader NZ market ended the trading session lower amidst selling in the consumer staples sector. On the same day, S&P/NZX 50 Index witnessed a decline of 0.74% to end at 12,327.230 and S&P/NZX 20 Index fell by 0.66% to 7,268.160. Also, S&P/NZX 10 Index encountered a decline of 0.52% to 12,207.730. Notably, S&P/NZX All Consumer Staples witnessed a strong decline of 4.02% to end at 3,459.150. However, S&P/NZX All Health Care rose by 0.39%.   

Macro Update: The export prices witnessed a rise of 7.1% in the March 2025 quarter, led by dairy prices, as per Stats NZ. The export prices have been rising since March 2024 and are now up by 17% than they were a year ago. Notably, the prices for dairy products (NZ’s top export commodity) encountered a rise of 10%, led by a 13% rise in milk powder prices as compared to the December 2024 quarter. The export prices for butter have also witnessed an increase. The butter prices are up by 38% than they were in the March 2024 quarter.  

Top Market Movers: Among top gainers, Pacific Edge Limited (NZX: PEB) witnessed a rise of 15.85% to $0.0950 per share. On the same day, TruScreen Group Limited (NZX: TRU) declined by 20.00% to $0.024 per share.  

Commodity Update: The dollar dropped to a six-week low Tuesday amid concerns over U.S. economic weakness tied to the ongoing trade war. Steel and aluminum tariffs will double to 50% Wednesday, the same day trade deal offers are due. Gold slipped 0.16% to $3,391.90, silver fell 1.30% to $34.24, and copper dipped 0.20% to $9,576.15. Brent crude rose 0.85% to $65.18 on supply fears linked to Iran and Canadian wildfires.  

Source: Trading View, Analysis: Kalkine Group   

Following a recent upward rally, the S&P/NZX 50 index encountered resistance as it approached an important ascending trendline that has been in place since October 2023. This trendline, which had previously supported the broader bullish trend, acted as a turning point, prompting a reversal in the index’s direction. In the sessions that followed, the index penetrated a notable support level near 12,400 points - previously established as the peak in March 2025 - alongside a breach of the trend following indicator 50-day SMA, suggesting a shift toward stronger downward momentum. Moreover, the 14-day Relative Strength Index (RSI) is trading below its midpoint in the latest trading session, indicating a negative market sentiment in the short-term.  

Our Stance: It could be said that selling in the consumer staples sector impacted the broader NZ market on 3rd June 2025. While the discussions between the US and China can provide some clarity, the investors can expect volatility in the broader market to continue. There are also tensions between the US and the European Union. Amidst these macro-economic developments, the investors are required to maintain a cautious stance. On 5th June, the data about initial jobless claims is expected to be released, which might impact the US markets.