NZ Market Closes in Red Amidst Decline in Consumer Staples Sector

Image Source : Krish Capital Pty Ltd

Index Update: On 18th March 2025, the broader NZ market ended in red amidst decline in the consumer staples sector. On the same day, S&P/NZX 50 Index witnessed a decline of 0.73% to end the session at 12,076.850 and S&P/NZX 20 Index fell by 0.63% to close at 7,192.420. Also, S&P/NZX 10 Index witnessed a fall of 0.50% to 11,784.770. Notably, S&P/NZX All Consumer Staples encountered a decline of 2.93% to close the session at 3,651.310.  

Macro Update: In the fortnightly economic update dated 7th March, the construction activity remained weak late last year. The Building Work Put in Place survey exhibited that the volume of work witnessed a decline of 4.4% in the December quarter, with the fall in residential work marginally larger than in the non-residential work. Notably, the weakness likely represented the delayed impact of building consents, which continue to fall since mid-2022.  

Top Market Movers: Among top gainers, Bremworth Limited (NZX: BRW) witnessed a rise of 5.00% to end the session at $0.63 per share. On the other hand, WasteCo Group Limited (NZX: WCO) declined by 7.41% to $0.025 per share. 

Commodity Update: The U.S. dollar remained near a five-month low against the euro and other major currencies on Tuesday, weighed down by concerns over escalating global trade tensions. Fears that President Trump's tariff policies could spark an economic slowdown have dampened investor sentiment, impacting the dollar. In the commodities market, gold rose 0.50% to $3,021.10, silver gained 0.57% to $34.51, and copper edged down 0.15% to $9,851.10. Brent crude climbed 0.40% to $71.33 after Israeli airstrikes in Gaza, but oil struggled for substantial gains as investors remained cautious ahead of the Federal Reserve's policy meeting. 

Source: Trading View, Analysis: Kalkine Group   

After breaching the upward trendline that had been in place since November 2024 and displaying signs of weakness, the S&P/NZX 50 index continues to break through a key support level formed by the neckline of a Head & Shoulders pattern, suggesting further downside potential. This weakness could drive the index toward strong support around 11,500 points before any signs of recovery emerge. Furthermore, the 14-day Relative Strength Index (RSI) remains below its midpoint, indicating a short-term negative market sentiment.   

Our Stance: It seems that the decline in consumer staples sector impacted the broader NZ market on 18th March. As of now, the global market is being aided by a rise in retail sales after the uncertainties impacted the broader markets earlier. On 17th March 2025, NASDAQ Composite Index witnessed a rise of 0.31% to end the session at 17,808.66. As per the US Census Bureau, the advance estimates of US retail and food services sales for February 2025, adjusted for seasonal variation as well as holiday and trading-day differences, but not for price changes, came in at $722.7 Bn, reflecting a rise of 0.2% from the previous month.