Healthcare Sector Weighs Over Broader NZ Market

Image Source : Krish Capital Pty Ltd

Index Update: On 16th May 2025, the broader NZ market closed the trading session in red amidst broad-based selling in the healthcare sector. On the same day, S&P/NZX 50 Index witnessed a decline of 0.73% to end the session at 12,786.790 and S&P/NZX 20 Index fell by 0.82% to 7,564.590. Also, S&P/NZX 10 Index encountered a fall of 0.97% to 12,685.690. Notably, healthcare sector witnessed selling pressure and S&P/NZX All Health Care declined by 1.04% to 3,127.290.   

Macro Update: Recently, RBNZ stated that risks to the financial system have witnessed an increase over the past 6 months. That being said, while the broader global economic environment remains more volatile, NZ’s financial institutions are in a robust position to help the economy. RBNZ also stated that domestically, there is subdued economic activity. Previously elevated interest rates, higher unemployment, together with a weakness in the housing market have been impacting the demand. However, reduced borrowing costs as well as increased agricultural export prices have been helping the debt serviceability.   

Top Market Movers: Among top gainers, The Warehouse Group Limited (NZX: WHS) witnessed a rise of 7.14% to end the session at $0.90 per share. On the other hand, TruScreen Group Limited (NZX: TRU) declined by 6.67% to $0.028 per share.   

Commodity Update: The dollar declined alongside U.S. Treasury yields on Friday after weaker-than-expected U.S. economic data fueled expectations of further Federal Reserve rate cuts this year. Gold fell 0.12% to $3,222.40, silver dropped 0.08% to $32.65, and copper edged down 0.08% to $9,579.75. Meanwhile, Brent crude rose 0.26% to $64.70, heading for a weekly gain of over 1% as optimism over U.S.-China trade talks outweighed concerns about Iranian supply returning.   

Source: Trading View, Analysis: Kalkine Group   

After a correction, the S&P/NZX 50 broke above its previous peak of 12,400 points and crossed the 50-day simple moving average, a key trend-following indicator - suggesting a potential recovery is underway. Additionally, in its most recent session, the index broke above the upward trendline that has been in place since October 2023, near the 12,750-point level, reinforcing the previous outlook. Moreover, the 14-day Relative Strength Index (RSI) is rising above the midpoint, indicating a positive market sentiment. 

Our Stance: It could be said that decline in the healthcare sector impacted the broader NZ market on 16th May 2025. While the broader global markets are being supported by the easing of worries between the US and China, there is still uncertainty about the trade policies, which can impact the investors’ sentiments and markets. With respect to NZ, RBNZ stated that the banks are possessing robust capital as well as liquidity buffers in order to maintain credit flows even if conditions are further deteriorated.