Buying in Healthcare Sector Marginally Supported NZ Market

Image Source : Krish Capital Pty Ltd

Index Update: On 2nd April 2025, the broader NZ market witnessed a marginal increase as S&P/NZX 50 Index rose by 0.06% to 12,320.190 and S&P/NZX 20 Index increased by 0.08% to 7,291.890. On the same day, S&P/NZX 10 Index rose by 0.30% to 12,126.420. However, IT sector witnessed a significant selling pressure as S&P/NZX All Information Technology declined by 1.45% to 2,879.280. S&P/NZX All Health Care encountered a rise of 0.86%.   

Macro Update: There were 33,595 new homes consented in Aotearoa NZ in the year ended February 2025, reflecting a decline of 7.4% as compared to the year ended February 2024, as per Stats NZ. Even though the annual number of multi-unit homes consented fell for the second year in a row, the number of stand-alone houses witnessed a marginal increase as compared to the year ended February 2024. In the year to February 2025, there were 17,743 multi-unit homes consented, reflecting a fall of 15% as compared to the year ended February 2024. 

Top Market Movers: Among top gainers, PGG Wrightson Limited (NZX: PGW) witnessed a rise of 9.50% to $1.96 per share. On the other hand, New Talisman Gold Mines Limited (NZX: NTL) declined by 12.05% to $0.073 per share. 

Commodity Update: The dollar edged higher, with other currencies staying within tight ranges as traders awaited details of U.S. President Donald Trump’s tariff plans. Trump has dubbed April 2 "Liberation Day," and reciprocal tariffs on countries imposing duties on U.S. goods will take effect immediately after his announcement, according to White House spokeswoman Karoline Leavitt. In commodities, gold rose 0.45% to $3,160.25, silver gained 0.64% to $34.52, and copper surged 0.55% to $9,736.50. Brent oil held steady at $74.47 per barrel after falling, amid concerns that new U.S. tariffs could escalate a global trade war and reduce crude demand. 

Source: Trading View, Analysis: Kalkine Group  

After penetrating the upward trendline that had been in place since November 2024 and exhibiting signs of weakness, the S&P/NZX 50 index continues to break below a key support level marked by the neckline of a Head & Shoulders pattern, indicating the possibility of further declines. This downward pressure could drive the index toward strong support around 11,500 points before any signs of recovery emerge. Although the index is currently experiencing a slight rebound, it remains below the broken trendline, which could signal a continuation of the short-term downtrend. Moreover, the 14-day Relative Strength Index (RSI) remains below its midpoint, reinforcing a bearish short-term market sentiment.  

Our Stance: It could be said that the buying in healthcare sector somewhat supported the broader NZ market. As of now, several factors continue to weigh over the broader global and NZ markets. The investors’ sentiments are being impacted by the tariff fears and worries related to the inflation. RBNZ, in February 2025, stated that timely indicators of economic activity, such as business surveys, have witnessed an improvement in the recent months. Notably, lower interest rates as well as increased export earnings might support economic growth.