Buying in Energy Sector Supports NZ Market

Image Source : Krish Capital Pty Ltd

Index Update: On 12th June 2025, the broader NZ market ended the trading session in green amidst buying in the energy sector. On the same day, S&P/NZX 50 Index witnessed a rise of 0.34% to end at 12,649.100 and S&P/NZX 20 Index rose by 0.23% to 7,446.670. Also, S&P/NZX 10 Index encountered an increase of 0.35% to 12,451.700. Notably, significant buying was witnessed in the energy sector and S&P/NZX All Energy rose by 1.93%.    

Macro Update: Stats NZ released data about electronic card transactions (May 2025). In May 2025, the spending in the retail industries fell 0.2% (or $9.9 Mn) and spending in the core retail industries declined 0.2% (or $11 Mn) as compared to April 2025. By the retail spending category, fuel was down $12 Mn (or 2.4%), durables declined $8.1 Mn (or 0.5%), consumables were down $1.6 Mn (or 0.1%), etc. The non-retail (excluding services) category rose $34 Mn (or 1.5%) from April 2025.  

Top Market Movers: Among top gainers, General Capital Limited (NZX: GEN) witnessed a rise of 6.31% to $0.325 per share. On the other hand, Metro Performance Glass Limited (NZX: MPG) declined 5.56% to $0.051 per share.  

Commodity Update: The dollar slipped on Thursday as expectations of Fed rate cuts grew and President Trump signaled a softer stance on tariffs, suggesting a possible extension of the July 8 trade deadline. Gold rose 1.57% to $3,396.00, silver gained 0.49% to $36.43, and copper advanced 0.44% to $9,693.10. Brent crude edged up 0.20% to $69.92 on fears of supply disruption amid rising tensions with Iran.  

Source: Trading View, Analysis: Kalkine Group   

Following a sustained upward rally that began in October 2023, the S&P/NZX 50 index appears to be transitioning into a consolidation phase. This is evidenced by the formation of a lower high and a higher low on the chart - typically a technical signal that the market may be entering a trading range. Unless there is a clear breakout above the previous resistance level at 12,881 points or a breakdown below the earlier support level at 12,254 points, this sideways movement is expected to persist in the near term. Additionally, the 14-day Relative Strength Index (RSI) is currently hovering around its midpoint, which reinforces the previous outlook. As a result, investors may need to wait for a decisive move in either direction before gaining greater clarity on the market’s next trend.  

Our Stance: It could be said that buying in the energy sector somewhat supported the broader NZ market on 12 June.  Moving forward, the increased uncertainty related to the US Fed rate cuts as well as global geopolitical tensions, mainly with Iran, can result in volatility in the broader global and NZ markets. RBNZ recently stated that annual CPI inflation is expected to increase to 2.7% in Q3 2025 and then return to near the 2% target midpoint from 2026. Also, the near-term rise in headline inflation includes elevated food and electricity price inflation.