Broader NZ Market Ends Lower Amidst Wall Street Sell-off

Image Source : Krish Capital Pty Ltd

Index Update: On 11th March 2025, the broader NZ market witnessed the impact of sell-off on the Wall Street. On 10th March 2025, NASDAQ Composite Index witnessed a decline of 4% to end the session at 17,468.32. On 11th March, S&P/NZX 50 Index encountered a decline of 0.84% to end the session at 12,410.970 and S&P/NZX 20 Index fell by 1.03% to 7,380.910. Also, S&P/NZX 10 Index witnessed a decline of 0.95%. On the same day, S&P/NZX All Financials ended lower with the decline of 2.03% to 1,389.460.  

Macro Update: As per Stats NZ, the meat and dairy product manufacturing sales volumes increased $253 million (or 3.1%) in the December 2024 quarter as compared with the September 2024 quarter. The increased meat exports resulted in a rise in the volume of sales for the meat and dairy product manufacturing industry. The total manufacturing sales increased $253 Mn (or 1.1%) in the December 2024 quarter. When excluding meat and dairy, manufacturing sales remained flat as compared with the September 2024 quarter.  

Top Market Movers: Among top gainers, Move Logistics Group Ltd (NZX: MOV) witnessed a rise of 14.29% to end at $0.24 per share. On the other hand, Santana Minerals Limited (NZX: SMI) declined by 7.46% to $0.62 per share. 

Commodity Update: The U.S. dollar weakened against the yen on Tuesday amid concerns about a potential U.S. economic slowdown and ongoing uncertainty surrounding the Trump administration's trade policies. Wall Street's persistent selloff added to the pressure. In commodities, gold rose by 0.01% to $2,901.30, silver increased by 0.12% to $32.56, and copper remained flat at $9,526.30. Brent crude dropped 0.70% to $68.77, nearing a three-year low due to fears of a global economic slowdown and escalating trade tensions. Trump's tariffs on China and retaliatory measures from Beijing further dampened market sentiment. 

Source: Trading View, Analysis: Kalkine Group   

In July 2024, the S&P/NZX 50 index broke above both the neckline of a Head and Shoulders pattern on the daily chart and a crucial resistance level set by its 2023 high. This breakout suggests that the uptrend, which began in November 2023, is likely to continue and may drive the index toward its 2021 historical peak. Despite the ongoing correction, the index is bouncing back above the key support level defined by the 2023 high and the pattern’s neckline, reinforcing expectations of a sustained uptrend. Additionally, the 14-day Relative Strength Index (RSI) is heading north from its oversold territory, signaling a potential rebound in the near future.  

Our Stance: It seems that the broader NZ market was impacted by the sell-off in the Wall Street as the market investors feared recession in the US. Furthermore, there are tensions as to how the tariff policies might impact the broader US growth prospects. Moving forward, investors need to track the macro-economic releases which can influence the US Fed’s stance on rate cuts. Amidst these tensions, the investors are required to be cautious about their equity investments. On 13th March, data about the Producer price index is expected to be released.