NZ Market Ends Lower: A Quick Overview

Image Source : Krish Capital Pty Ltd

Index Update: On 17th March 2025, the broader NZ market closed in red amidst decline in the communications services sector. On the same day, S&P/NZX 50 Index witnessed a decline of 0.82% to end at 12,166.140 and S&P/NZX 20 Index fell by 0.88% to 7,237.920. Also, S&P/NZX 10 Index fell by 0.98%. Notably, S&P/NZX All Communications Services witnessed a decline of 2.72% to close the session at 1,855.700. However, S&P/NZX All Consumer Staples increased by 2.14%.  

Macro Update: As per FEU dated 7th March 2025, the retail activity improved late last year, hinting to the potential turnaround in household spending as well as an ongoing recovery in tourism. Notably, international trade continued to provide support for the broader domestic economy through late last year. With respect to the volumes, the goods exports increased 1.3% while goods imports declined 1.7%, reflecting a positive 0.6 percentage point contribution to real GDP growth in the quarter ended December. 

Top Market Movers: Among top gainers, Smartpay Holdings Limited (NZX: SPY) witnessed a rise of 34.92% to end at $0.85 per share. On the other hand, NZ King Salmon Investments Limited (NZX: NZK) declined by 11.54% to $0.23 per share. 

Commodity Update: The U.S. dollar remained near a five-month low on Monday, weighed down by President Trump's unpredictable trade policies and weak economic data. March data revealed U.S. consumer sentiment dropped to a near 2-1/2-year low, with inflation expectations rising amid concerns over Trump’s tariffs, sparking a global trade war. In commodities, gold fell 0.19% to $2,995.30, silver dropped 0.36% to $34.31, and copper edged up 0.01% to $9,796.70. Brent crude rose 1.06% to $71.33. U.S. stock futures declined, while Asian markets gained. The week’s key focus is central bank meetings, with the U.S. Federal Reserve expected to hold rates steady. 

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 forming a bottom divergence near its oversold territory, signalling a potential rebound in the near future.  

Our Stance: It seems that the significant decline in the communications services sector impacted the broader NZ market on 17th March. Recently, RBNZ stated that the headline inflation declined over the past year but has witnessed a marginal increase in recent months. This recent increase in many of the trading partners is largely accounted for by increased fuel and energy prices. Notably, the market players anticipate that most central banks in advanced economies would continue to reduce the policy interest rates over the coming year.