Broader NZ Market Ends on a Mixed Note Amidst Uncertainties

Image Source : Krish Capital Pty Ltd

Index Update: On 20th March 2025, the broader NZ market closed the session on a mixed note, with S&P/NZX 50 Index witnessing a rise of 0.07% to 12,054.720 and S&P/NZX 20 Index declining by 0.32% to 7,139.830. On the same day, S&P/NZX 10 Index encountered a fall of 0.18% to close at 11,773.550. Also, S&P/NZX All Energy witnessed a fall of 2.60% to 1,675.150. However, S&P/NZX All Communications Services increased by 1.27%.   

Macro Update: Stats NZ stated that NZ’s GDP increased 0.7% in the December 2024 quarter, after the 1.1% decline in the September 2024 quarter. Notably, 11 of the 16 industries increased this quarter. The largest increases were witnessed in rental, hiring, and real estate services, retail trade and accommodation, as well as healthcare and social assistance. Also, increased spending by international visitors resulted in increased activity in tourism-related industries.  

Top Market Movers: Among top gainers, New Talisman Gold Mines Limited (NZX: NTL) rose by 14.89% to $0.054 per share. On the other hand, Trade Window Holdings Limited (NZX: TWL) declined by 5.26%.  

Commodity Update: The dollar weakened on Thursday after the Federal Reserve signalled potential interest rate cuts later this year, despite concerns over U.S. tariffs. Fed policymakers forecasted two quarter-point rate cuts in 2025, maintaining their outlook from three months ago, even as they anticipate slower economic growth and higher inflation. On Wednesday, the Fed kept its benchmark interest rate steady at 4.25%-4.50%. In commodities, gold rose 0.52% to $3,057, marking a new lifetime high, while silver surged 0.72% to $34.45, and copper increased 0.48% to $10,029.50. Brent crude also gained 0.57% to $71.18, driven by a decline in U.S. fuel inventories and escalating Middle East tensions. 

Source: Trading View, Analysis: Kalkine Group   

After breaching the upward trendline that had been in place since November 2024 and displaying signs of weakness, the S&P/NZX 50 index continues to break through a key support level formed by the neckline of a Head & Shoulders pattern, suggesting further downside potential. This weakness could drive the index toward strong support around 11,500 points before any signs of recovery emerge. Furthermore, the 14-day Relative Strength Index (RSI) remains below its midpoint, indicating a short-term negative market sentiment.  

Our Stance: It seems that the broader global markets are being impacted by the recent meeting of the US Fed. The US Fed left the key interest rate unchanged and noted that the broader outlook is now more uncertain. Amidst these uncertainties, investors are required to consider the macroeconomic factors while considering the equity investments. On 25th March, data about consumer confidence is expected to be released, which can affect the broader markets.