Broader NZ Market Ends Significantly Higher

Image Source : Krish Capital Pty Ltd

Index Update: On 5th August 2025, the broader NZ market ended the trading session higher after strong buying in the financials sector. On the same day, S&P/NZX 50 Index witnessed a rise of 1.52% to end at 12,877.040 and S&P/NZX 20 Index increased by 1.64% to 7,552.870. Also, S&P/NZX 10 Index encountered an increase of 2.19% to 12,635.190. Notably, S&P/NZX All Financials witnessed a significant rise of 3.37% to end at 1,597.740.    

Macro Update: As per the FEU dated 31 July 2025, the households are generally optimistic regarding the future as they continue to refix onto the reduced mortgage rates. That being said, they are cautious about spending amid the softness in the labour market and job insecurity. Also, business confidence remains generally upbeat, with firms waiting for the impact of reduced interest rates to filter through and lift the subdued domestic demand.   

Top Market Movers: Among top gainers, KMD Brands Limited (NZX: KMD) witnessed a rise of 6.38% to end at $0.25 per share. On the other hand, Promisia Healthcare Limited (NZX: PHL) fell by 8.89% to $0.41 per share.  

Commodity Update: The U.S. dollar fluctuated on Tuesday amid growing expectations of Federal Reserve rate cuts following the release of a weak U.S. jobs report. Investor sentiment was further pressured by concerns over the broader economic impact of recently imposed U.S. tariffs. Gold edged up 0.08% to $3,429.10, silver rose 0.35%, copper added 0.12%, while Brent crude slipped 0.10% to $68.72, stabilising after recent losses driven by increasing supply and demand concerns. 

Source: Trading View, Analysis: Kalkine Group  

Following a consolidation phase that came after a sustained rally starting in October 2023, the S&P/NZX 50 index has recently attempted to rebound and re-test the ascending trendline from below, though this effort has not yet succeeded. In the short term, caution is warranted as the index has broken below a minor double top formation. Immediate support lies at 12,614 points, and a decisive break below this level could trigger a further decline toward the next support around 12,421. Conversely, a breakout above the 12,983 level would signal renewed bullish momentum and potentially pave the way for a move to fresh highs. Additionally, the 14-day Relative Strength Index (RSI) has surpassed its midpoint in the last trading session, reflecting a shift from investor sentiment from negative to positive.   

Our Stance: It could be said that the strong buying in the financial sector somewhat supported the broader NZ market on 5th August. As per the FEU dated 31 July 2025, the stronger than anticipated growth in the US and EU and upgraded IMF forecasts demonstrated that the impacts of increased US tariffs were not as negative as feared. Also, NZ’s historically high dependency on animal product exports results in increased exposure to price fluctuations, trade barriers, and shifts in global demand. Amidst uncertainties, investors are required to be cautious.