NZ Market Ends in Red Amidst Volatility

Image Source : Krish Capital Pty Ltd

Index Update: On 9th April 2025, the broader NZ market closed lower amidst decline in the materials sector. On the same day, S&P/NZX 50 Index witnessed a decline of 0.71% to end the session at 11,806.550 and S&P/NZX 20 Index fell by 0.67% to 7,012.920. Also, S&P/NZX 10 Index encountered a decline of 0.58% to 11,630.490. Notably, S&P/NZX All Materials witnessed a significant decline of 3.36% to end at 1,012.930.  

Macro Update: As per Fortnightly Economic Update dated 4 April 2025, the direct impact of tariffs on NZ is expected to be relatively modest. The tariffs impact only a small proportion of NZ’s global trade, which includes mostly meat, dairy and wine. Also, the export sector would be able to export to the US and considering that tariffs are similar or lower than other countries, NZ is expected to remain competitive. 

Top Market Movers: Among top gainers, Radius Residential Care Limited (NZX: RAD) witnessed a rise of 9.30% to $0.235 per share. On the other hand, Santana Minerals Limited (NZX: SMI) declined by 10.00% to $0.45 per share. 

Commodity Update: The U.S. dollar weakened against the yen and Swiss franc on Wednesday as looming 104% tariffs on China rattled global markets. President Trump, standing firm on the increase, accused Beijing of yuan manipulation. The Chinese currency hit record lows. Gold rose 0.88% to $3,016.60, silver gained 0.42%, while copper slipped 0.54%. Brent crude dropped 3.39% to $60.69 amid demand fears from the escalating U.S.-China trade war and expectations of rising global oil supply. 

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, after a sharp decline, the index is nearing 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 rebound from the mentioned support level.   

Our Stance: It could be said that the broader global and NZ markets are witnessing significant volatility amidst the news and developments related to the tariffs. Also, as per the recent FEU, the indirect impacts from slower global growth would be more significant as compared to any sort of direct impacts. The tariff announcement came when the NZ economy was gradually recovering. Since the trade uncertainties might continue to impact the global and NZ markets, the investors are required to be watchful while making equity investments.