Broader NZ Market Ends Lower Amidst Macro-Economic Worries

Image Source : Krish Capital Pty Ltd

Index Update: On 4th April 2025, the broader NZ market ended in red as Wall Street witnessed significant sell-off due to the announcements related to tariffs. On 3rd April 2025, NASDAQ Composite Index witnessed a decline of 5.97% to end the session at 16,550.61. On 4th April, the S&P/NZX 50 Index witnessed a decline of 0.92% to 12,225.280 and the S&P/NZX 20 Index fell by 0.65% to 7,251.760. Also, the S&P/NZX 10 Index declined by 0.74%. S&P/NZX All Information Technology witnessed a significant fall of 4.57%.  

Macro Update: RBNZ recently stated that the Committee discussed the risks posed by higher trade barriers. Over the medium term, the trade barriers can be increased much further. Notably, the increased trade barriers can reduce global productive capacity. Higher trade restrictions can impact economic activity in NZ. Any sort of monetary response is expected to be dependent on the impact of trade restrictions on medium-term inflationary pressures. 

Top Market Movers: Among top gainers, New Talisman Gold Mines Limited (NZX: NTL) witnessed a rise of 12.31% to $0.0730 per share. On the other hand, AoFrio Limited (NZX: AOF) declined by 9.09% to $0.1000 per share. 

Commodity Update: The U.S. dollar remained under pressure against the yen, which hovered near a six-month high, as markets assessed the impact of President Donald Trump’s broad new tariffs. The dollar steadied after rebounding from six-month lows against the euro and sterling, with attention now on the U.S. payrolls report for economic insights and monetary policy direction. In commodities, gold slipped 0.21% to $3,115.20, silver dropped 1.27% to $31.56, and copper declined 0.75% to $9,288.75. Brent oil fell 0.40% to $69.84 per barrel after OPEC+ accelerated output increases, deepening losses from Trump’s trade measures. 

Source: Trading View, Analysis: Kalkine Group  

After penetrating the upward trendline that had been in place since November 2024 and exhibiting signs of weakness, the S&P/NZX 50 index continues to break below a key support level marked by the neckline of a Head & Shoulders pattern, indicating the possibility of further declines. This downward pressure could drive the index toward strong support around 11,500 points before any signs of recovery emerge. Although the index is currently experiencing a slight rebound, it remains below the broken trendline, which could signal a continuation of the short-term downtrend. Moreover, the 14-day Relative Strength Index (RSI) remains below its midpoint, reinforcing a bearish short-term market sentiment.  

Our Stance: It could be said that the significant sell-off in the broader global markets impacted the NZ market on 4th April 2025. The recent news related to the US tariffs have been creating significant market uncertainty, impacting the investors’ risk appetite. The broad-based market volatility has been demonstrating caution. Moving forward, the market experts believe that there could be increased volatility. Also, any news related to the tariffs and interest rates might continue to impact the broader markets.