Buying in Materials Sector Supports Broader NZ Market

Image Source : Krish Capital Pty Ltd

Index Update: On 4th June 2025, the broader NZ market closed the trading session higher amidst buying in the materials sector. On the same day, S&P/NZX 50 Index witnessed a rise of 1.36% to end the session at 12,494.710 and S&P/NZX 10 Index rose by 1.31% to end at 12,367.930. Notably, significant buying was witnessed in the materials sector and S&P/NZX All Materials witnessed an increase of 4.56% to 1,021.680. Also, S&P/NZX All Consumer Staples increased by 3.02%.   

Macro Update: As per FEU dated 23 May 2025, the consumer and business surveys have now started to show unwinding of some of the initial tariff shock. The preliminary release of May’s PMI business sentiment gauges for developed economies demonstrated that future output expectations had fully reversed the April’s decline. The property sector weakness in China is also impacting growth, and there are signs that policy stimulus is waning, demonstrating that China’s economy would be slowing further.  

Top Market Movers: Among top gainers, Santana Minerals Limited (NZX: SMI) witnessed a rise of 10.83% to end at $0.665 per share. On the other hand, Me Today Limited (NZX: MEE) declined by 9.23% to $0.059 per share.  

Commodity Update: The dollar edged lower on Wednesday ahead of key U.S. employment data and trade negotiations led by President Trump. A Wednesday deadline loomed for countries to present trade offers, coinciding with a tariff hike on steel and aluminium. Meanwhile, gold rose 0.34% to $3,380.50, silver gained 0.30%, and copper climbed 0.17%. Brent crude inched up 0.10% to $65.58 amid rising OPEC+ output and global economic 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 the buying in materials sector somewhat supported the broader NZ market on 4th June. As per the recent FEU, the easing of recession risk has been reflected in the reversal of US equity market losses. However, the uncertain trade environment and volatile capital markets continue to impact the investors’ sentiments. Moving forward, the macro-economic data points are expected to affect the capital markets. The data about the US trade deficit is expected to be released on 5th June.