NZ Market Ends in Red Amidst Macro-Economic Tensions

Image Source : Krish Capital Pty Ltd

Index Update: On 15th April 2025, the NZ market ended the trading session in red amidst broad-based sell-off. On the same day, S&P/NZX 50 Index witnessed a decline of 0.79% to end the session at 12,011.340 and S&P/NZX 20 Index fell by 0.85% to 7,143.280. Also, S&P/NZX 10 Index encountered a decline of 0.90% to 11,864.810. Notably, significant selling was witnessed in the IT sector and S&P/NZX All Information Technology fell by 1.68%. However, S&P/NZX All Materials rose by 1.92%.  

Macro Update: The food prices rose 3.5% in the 12 months ended March 2025, after a 2.4% rise in the 12 months to February 2025, as per Stats NZ. The higher prices for the grocery food group and the meat, poultry, and fish group contributed most to the annual rise in food prices, up 5.1% and 5.3%, respectively. Notably, the price increase for grocery food was because of increased prices for milk, butter, and chocolate. The milk prices rose 16.0% while butter prices witnessed a rise of 63.6% in the 12 months ending March 2025. 

Top Market Movers: Among top gainers, Michael Hill International Ltd (NZX: MHJ) witnessed a rise of 5.81% to $0.455 per share. On the other hand, Rakon Limited (NZX: RAK) declined by 8.16% to $0.45 per share.  

Commodity Update: The dollar remained steady on Tuesday but stayed close to recent lows against the euro and yen amid ongoing uncertainty over U.S. tariff changes. Gold rose 0.38% to $3,238.40, while silver slipped 0.12% to $32.20. Copper edged up 0.06% to $9,193.20. Brent crude gained 0.42% to $65.515, supported by possible U.S. tariff exemptions and a rebound in Chinese oil imports ahead of potential Iranian supply cuts. 

Source: Trading View, Analysis: Kalkine Group   

Following a break below the upward trendline that had held since November 2024 and showing signs of weakness, the S&P/NZX 50 index has continued to fall beneath a key support level — the neckline of a Head & Shoulders formation — suggesting the potential for further downside. This bearish momentum may push the index toward a major support zone around 11,500 points. At present, the index is rebounding near this strong support area and showing early signs of stabilization, with a possible bullish divergence emerging on the 14-day Relative Strength Index (RSI) in its oversold territory. This could signal a possible recovery in case the index manages to surpass its previous peak at 12,400 points.  

Our Stance: It could be said that the selling in the IT sector impacted the broader NZ market on 15th April 2025. As of now, the global macroeconomic uncertainty is being driven by the tariff news from the Trump administration. The disruption in trade environment has the potential to impact the global and NZ markets. Moving forward, while the focus can be shifted towards earnings, the outlook on interest rates can also impact the movement of broader markets. Therefore, investors are required to be cautious about the equity investments.