Materials Sector Impacts NZ Market

Index Update: On 17th February, the NZ market closed lower, amidst broad-based sell-off, mainly led by the decline in materials sector. On the same day, S&P/NZX 50 Index witnessed a decline of 0.66% to end at 13,031.620 and S&P/NZX 20 Index fell by 0.63% to 7,420.630. Also, S&P/NZX 10 Index encountered a fall of 0.80% to 12,470.640. Notably, strong sell-off was witnessed in the materials sector, with S&P/NZX All Materials declining by 3.99%.     

Macro Update: Stats NZ stated that food prices rose 4.6% in the 12 months ended January 2026. This was after the 4.0% rise in the 12 months ended December 2025. Notably, increased prices for grocery food group, an increase of 4.0%, contributed the most to the annual rise in food prices. This was followed by meat, poultry, and fish, which increased 8.9% annually.   

Market Movers: Among top gainers, WasteCo Group Limited (NZX: WCO) witnessed a rise of 9.09% to end at $0.012 per share. On the other hand, Santana Minerals Limited (NZX: SMI) declined by 10.39%.   

Commodity Update: The U.S. dollar held firm on Tuesday as investors looked ahead to signals later this week on the potential timing of Federal Reserve rate cuts. Precious metals retreated, with gold falling 0.74% to USD 4,978.90 and silver down 1.51% to USD 75.40, while copper eased 0.58% to USD 12,781.75. Geopolitical focus remained on Iran’s naval drills near the Strait of Hormuz ahead of nuclear talks with the U.S. in Geneva.  

Analysis: Kalkine Group  

The S&P/NZX 50 Index extended its short-term negative momentum for a third consecutive session, declining 86.27 points (-0.66%) to close at 13,031.63. The price action reflects ongoing selling pressure and cautious investor sentiment. From a technical perspective, a decisive break below the key support zone could open the door to renewed downside momentum, with the next lower support area coming into focus near the prior trough around 12,850. On the upside, any recovery attempts are likely to face resistance near the 13,250 level. Momentum indicators remain weak, with the 14-period Relative Strength Index (RSI) positioned in bearish territory, reinforcing the prevailing negative bias. Unless the index can reclaim lost support levels, the near-term outlook remains tilted to the downside, with risks of further consolidation or corrective weakness.  

Our Stance: As of now, the US markets are being impacted by the fears of AI disruption. Amidst such trends, global investors are now eyeing PCE index data, which is scheduled to be released on February 20. Furthermore, the minutes of Fed's January FOMC meeting are also required to be monitored. The ongoing concerns about the AI sector weighed over the NZ markets also, with traders and investors maintaining a cautious stance amidst the upcoming RBNZ’s meeting. As of now, the broader market expects RBNZ to hold the rates.