Buying in Financial Sector Supports NZ Market

Image Source : Krish Capital Pty Ltd

Index Update: On 27^th June 2025, the NZ market ended the trading session higher amidst broad-based buying. On the same day, S&P/NZX 50 Index witnessed a rise of 0.83% to end the session at 12,583.590 and S&P/NZX 20 Index increased by 0.98% to 7,381.710. Also, S&P/NZX 10 Index encountered a rise of 1.04% to 12,355.420. Notably, significant buying was witnessed in the financials sector. S&P/NZX All Financials increased by 1.96%.  

Macro Update: As per FEU dated 19 June 2025, NZ’s annual current account deficit narrowed to 5.7% of GDP during the quarter ended March (previously 6.1% and revised from 6.2%). This was marginally higher than the Budget Update forecast of 5.6%. Notably, the strength in goods exports resulted in a smaller deficit in the quarter. However, weaker services exports, along with increased income payments, resulted in partial offsets.   

Top Market Movers: Among top gainers, Rakon Limited (NZX: RAK) witnessed a rise of 7.14% to end at $0.60 per share. On the same day, Synlait Milk Limited (NZX: SML) declined by 6.06% to $0.62 per share. 

Commodity Update: The dollar drifted near 3.5-year lows against the euro and pound on Friday, pressured by expectations of deeper U.S. rate cuts and uncertainty over trade deals ahead of July tariffs. Gold slipped 1.00% to $3,314.70, silver fell 0.55% to $36.45, and copper eased 0.17% to $9,897.10. Brent crude rose 0.50% to $68.07, supported by firm U.S. demand despite fading Middle East supply concerns. 

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 financial sector supported the broader NZ market on 27 June. As of now, the broader global and NZ markets are being influenced by the optimism around trade deals. RBNZ recently stated that the NZ economy has started to recover, after contracting over the middle of 2024. Amidst uncertainty around rate cuts and fluctuations in the commodity markets, the investors are required to maintain a cautious stance.