NZ Market Closes Lower

Image Source : Krish Capital Pty Ltd

 Index Update: On 8th May 2025, the broader NZ market ended in red amidst decline in the financials sector. On the same day, S&P/NZX 50 Index witnessed a fall of 0.24% to end the session at 12,467.030 and S&P/NZX 20 Index fell by 0.32% to 7,386.170. Also, S&P/NZX 10 Index encountered a decline of 0.82% to 12,329.520. Notably, S&P/NZX All Financials witnessed a strong fall of 2.68% to end at 1,486.990. S&P/NZX All Communications Services encountered a rise of 2.04% to close the session at 2,034.280.   

Macro Update: The Treasury released the interim financial statements of the government of NZ for the 9 months ended March 31, 2025. The core Crown tax revenue, which stood at $89.5 Bn, was $0.2 Bn (or 0.2%) above forecast. On the other hand, core Crown expenses amounted to $104.1 Bn, which were $0.6 Bn (or 0.5%) below forecast. Notably, the core Crown residual cash deficit stood at $5.3 Bn, which was $1.7 Bn lower than forecast. This was mainly because of net core Crown capital cash outflows, which were $1.5 Bn lower than the forecast.  

Top Market Movers: Among top gainers, Black Pearl Group Limited (NZX: BPG) witnessed a rise of 8.06% to end the session at $0.67 per share. On the other hand, Metro Performance Glass Limited (NZX: MPG) encountered a decline of 8.16% to $0.045 per share.   

Commodity Update: On Thursday, the U.S. dollar held steady against the euro after its biggest two-week gain, supported by easing U.S.-China trade tensions and Fed warnings about rising inflation and unemployment risks. Investors await a key meeting in Switzerland. Gold rose 0.47% to $3,407.70, silver gained 0.60% to $32.95, and copper climbed 0.41% to $9,462.80. Brent crude remained flat at $61.12 after a sharp drop in the previous session. 

Source: Trading View, Analysis: Kalkine Group   

After undergoing 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, the 14-day Relative Strength Index (RSI) is rising above the midpoint, lending further support to this outlook. If this momentum continues, the index may approach the upward trendline that has been in place since October 2023, near the 12,750-point level, which could influence its next direction.  

Our Stance: A decline in the financials sector somewhat impacted the broader NZ market on 8th May 2025. Moving forward, the investor sentiment is expected to be affected by the macro-economic global developments. The US Federal Reserve, which decided to keep the rates steady, highlighted risks revolving around a broader slowdown as well as increased inflation. While there are uncertainties related to the global outlook, the NZ markets might be affected by macro releases. Stats NZ is expected to release data about electronic card transactions (April 2025) on 14th May.