Image Source : Krish Capital Pty Ltd

Index Update: On 20th August 2025, the NZ market ended significantly higher amidst broad-based buying momentum. On the same day, S&P/NZX 50 Index witnessed a rise of 1.10% to end at 13,071.300 and S&P/NZX 20 Index rose by 1.16% to 7,669.120. Notably, S&P/NZX 10 Index increased by 1.27% to 12,802.630. S&P/NZX All Communications Services witnessed a strong increase of 2.40% to end at 2,336.480.  

Macro Update: The Monetary Policy Committee decided to decrease the OCR by 25 bps to 3%. As per the release, the speed of NZ’s economic recovery would be influencing the future path of the OCR. Notably, the annual consumers price index inflation is within the Monetary Policy Committee’s 1% - 3% target band. Notably, recent increases in food prices as well as administered prices have resulted in the near-term inflationary pressure.

Top Market Movers: Among top gainers, Metro Performance Glass Limited (NZX: MPG) witnessed a rise of 20.00% to end at $0.036 per share. On the other hand, My Food Bag Group Limited (NZX: MFB) declined by 4.17%. 

Commodity Update: The U.S. dollar strengthened for a third straight session on Wednesday ahead of the Federal Reserve’s Jackson Hole symposium, where traders await policy cues. Gold eased 0.07% to $3,356.10, silver slipped 0.42% to $37.17, while copper inched up 0.02% to $9,699.15. Brent crude rose 0.21% to $65.93 amid resurfacing supply concerns, as prolonged Russia-Ukraine peace talks keep sanctions intact and raise risks of further restrictions.

Source: Trading View, Analysis: Kalkine Group 

Following a consolidation phase that came after a sustained rally starting in October 2023, the S&P/NZX 50 index has recently attempted to rebound and re-test the ascending trendline from below, though this effort has not yet succeeded. In the short term, the index has appeared a positive sign when surpassing a minor Inverse head and shoulders pattern. Hence, a breakout above the 12,983 level would signal renewed bullish momentum and potentially pave the way for a move to fresh highs. Additionally, the 14-day Relative Strength Index (RSI) is heading north from its midpoint in the last trading session, reflecting a positive investor sentiment in the short-term.

Our Stance: It could be said that buying in the communications services sector somewhat supported the broader NZ market on 20 August. RBNZ recently stated that tariffs as well as economic policy uncertainty have been impacting the global economic outlook. The growth in some of the trading partners, mainly China, was higher than anticipated in Q2 FY 2025. However, it is expected to moderate in the upcoming quarters. 

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