NZ Market Ends in Red

Image Source : Krish Capital Pty Ltd

Index Update: On 13th March 2025, the broader NZ market witnessed a decline amidst selling momentum in the energy sector. On the same day, S&P/NZX 50 Index encountered a fall of 0.33% to end at 12,209.050 and S&P/NZX 20 Index fell by 0.47% to close at 7,261.210. Also, S&P/NZX All Energy declined by 1.03% to end at 1,728.900 and S&P/NZX All Financials fell by 1.01%. However, S&P/NZX Primary Sector Index witnessed a rise of 0.75% to 12,364.980.  

Macro Update: As per the FEU dated 7 March 2025, the retail activity improved late last year, hinting at the potential turnaround in household spending as well as an ongoing recovery in tourism. The Retail Trade Survey for the December quarter demonstrated volumes rising 0.9% in the quarter and 0.2% in the year. Also, international trade continued providing support for the domestic economy through the late last year.  

Top Market Movers: Among top gainers, PaySauce Limited (NZX: PYS) witnessed a rise of 4.17% to end at $0.20 per share. On the other hand, Cooks Coffee Company Limited (NZX: CCC) declined by 8.77%.  

Commodity Update: The dollar saw a slight rebound on Thursday, bolstered by rising U.S. Treasury yields, as markets grappled with the potential effects of an escalating global trade war on U.S. inflation and growth. President Trump’s threat of additional tariffs on European Union goods added to investor uncertainty, with major U.S. trading partners signalling retaliation. In the commodities market, gold rose by 0.20% to $2,952.55, silver gained 0.16% to $33.79, and copper surged 0.22% to $9,803.15. Meanwhile, Brent crude dropped 0.10% to $70.88, as concerns over the economic impact of tariffs outweighed positive U.S. gasoline stock data. 

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 trading above the key support level defined by the pattern’s neckline, reinforcing expectations of a sustained uptrend. Additionally, the 14-day Relative Strength Index (RSI) is trading near its oversold territory, signaling a potential rebound in the near future.  

Our Stance: It seems that the sell-off in the energy sector weighed over the NZ market. There are uncertainties related to the trade policy, which have been impacting the investors’ sentiments. RBNZ stated that headline inflation is projected to increase in coming quarters, implying a lower NZ dollar exchange rate and increased oil prices, but remain within the target band. Amidst global uncertainties, the market players are required to maintain a cautious stance.