NZ Market Ends in Red- A Quick Look

Image Source : Krish Capital Pty Ltd

Index Update: On 27th March 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 0.23% to end the session at 12,305.790 and S&P/NZX 20 Index declined by 0.31% to 7,285.200. Also, S&P/NZX 10 Index fell by 0.65% to 12,076.260. Notably, S&P/NZX All Financials encountered a decline of 1.77% to close the session at 1,416.830. However, S&P/NZX All Materials rose by 2.47%.  

Macro Update: As per FEU dated 21 March 2025, net migration has witnessed further signs of stabilisation. January’s visitor arrivals showcased more strength than anticipated. Visitor arrivals in the three months to January increased slightly to 88% of the pre-COVID levels, while the month-on-month arrivals were near to pre-COVID levels at 93%. Also, the US trade policy has been weighing on the global growth prospects.  

Top Market Movers: Among top gainers, New Talisman Gold Mines Limited (NZX: NTL) witnessed a rise of 22.86% to end the session at $0.086 per share. On the other hand, Rua Bioscience Limited (NZX: RUA) declined by 7.14%.  

Commodity Update: The dollar remained near a three-week high on Thursday following U.S. President Donald Trump's announcement of new 25% tariffs on all auto imports, set to take effect on April 2. The move escalates the global trade war, raising concerns over potential inflationary pressures. Despite this, Trump stated that reciprocal tariffs on other countries will be "lenient." In commodities, gold rose 0.41% to $3,064.60, silver increased 0.29% to $34.32, and copper climbed 0.40% to $9,973.30. Brent crude saw a slight gain of 0.10%, reaching $73.84 per barrel, following a previous session’s strong surge. 

Source: Trading View, Analysis: Kalkine Group  

After penetrating the upward trendline that had been in place since November 2024 and exhibiting signs of weakness, the S&P/NZX 50 index continues to break below a key support level marked by the neckline of a Head & Shoulders pattern, indicating the possibility of further declines. This downward pressure could drive the index toward strong support around 11,500 points before any signs of recovery emerge. While the index is currently experiencing a minor rebound, it is approaching resistance at the 21-day SMA, which could lead to a continuation of the short-term downtrend. Moreover, the 14-day Relative Strength Index (RSI) remains below its midpoint, reinforcing a bearish short-term market sentiment.   

Our Stance: It could be said that the decline in the financial sector somewhat impacted the broader NZ market on 27 March. As of now, the overall economic landscape remains uncertain, prompting the investors to stay alert about both the local and global developments. The investors remain concerned about the US economy falling into recession. Also, the uncertainty around the trade policies continue to add to the fears. Therefore, investors are required to be cautious when it comes to equity investments.