NZ Market Closes Higher

Image Source : Krish Capital Pty Ltd

Index Update: On 27th February 2025, the broader NZ market ended in green amidst significant buying in the financials sector. On the same day, S&P/NZX 50 Index witnessed a rise of 0.71% and S&P/NZX 20 Index rose by 0.68% to close at 7,508.730. Also, S&P/NZX 10 Index encountered a rise of 0.75%. S&P/NZX All Financials increased by 2.42%. However, materials and energy sectors witnessed a sell-off.  

Macro Update: As per Fortnightly Economic Update dated 21st February 2025, net migration has started showing signs of stabilizing, increasing to 7,500 in the December quarter. Also, the housing market activity has been demonstrating signs of a gradual recovery. The REINZ House Price Index increased 0.2% in January (seasonally adjusted). NZ’s merchandise trade continued rebalancing in early-2025. The business activity has also shown signs of stabilizing.  

Top Market Movers: Among top gainers, TruScreen Group Limited (NZX: TRU) witnessed a rise of 9.68% to end at $0.034 per share. On the other hand, Metro Performance Glass Limited (NZX: MPG) declined by 6.78% to $0.055 per share. 

Commodity Update: The U.S. dollar strengthened above an 11-week low on Thursday as President Donald Trump's ambiguous remarks about imposing tariffs on Europe and further delays in tariffs on Canada and Mexico created market uncertainty. Trump suggested that 25% tariffs on Mexican and Canadian goods could be enacted by April 2, pushing back the March 4 deadline. In commodity markets, gold dipped 0.12% to $2,926.80, silver fell 0.97% to $32.13, and copper decreased 0.39% to $9,425.50. Meanwhile, Brent crude oil rose 0.30% to $72.72 after Trump reversed Chevron's license to operate in Venezuela, potentially tightening the oil supply. 

 Source: Trading View, Analysis: Kalkine Group  

In July 2024, the S&P/NZX 50 index broke above both the neckline of a Head and Shoulders pattern on the daily chart and a crucial resistance level set by its 2023 high. This breakout suggests that the uptrend, which began in November 2023, is likely to continue and may drive the index toward its 2021 historical peak. Despite the ongoing correction, the index is bouncing back above the key support level defined by the 2023 high and the pattern’s neckline, reinforcing expectations of a sustained uptrend. Additionally, the 14-day Relative Strength Index (RSI) is reversing from its oversold territory, signaling a potential rebound in the near future.  

Our Stance: It could be said that broad-based buying supported the NZ market on 27th February 2025. As per the FEU, the lower exchange rate, increased commodity prices as well as robust domestic production will continue to support exports over early-2025. Apart from these factors, the broader NZ economy is expected to be influenced by the fluctuations in the global economy and key developments by the Trump administration on the trade front.