NZ Market Witnesses Significant Buying Momentum

Image Source : Krish Capital Pty Ltd

Index Update: On 26th March 2025, the broader NZ market closed significantly higher amidst strong buying in the healthcare sector. On the same day, S&P/NZX 50 Index witnessed a rise of 1.23% and S&P/NZX 20 Index rose by 1.37% to end the session at 7,307.670. Also, S&P/NZX 10 Index increased by 1.72% and S&P/NZX 50 Portfolio Index rose 0.70%. Notably, S&P/NZX All Health Care encountered an increase of 3.68% to end the session at 2,985.150.  

Macro Update: As per FEU dated 21 March 2025, the tourist spending accelerated, aiding a recovery in the service sectors. Notably, domestic activity increased, although the broad-based recovery is still yet to emerge. As per the release, the OECD’s latest economic update warned that the US tariff actions have been weighing on global growth and that more increases would be weakening the outlook. Notably, the increased government spending in Europe and China can help to cushion the tariff impacts.  

Top Market Movers: Among top gainers, Ryman Healthcare Limited (NZX: RYM) witnessed a rise of 5.98%. On the other hand, Synlait Milk Limited (NZX: SML) declined by 6.33%.  

Commodity Update: On Wednesday the U.S. dollar remained stable as markets awaited further details on President Trump’s trade policies, particularly the new round of tariffs next week. Trump introduced secondary tariffs of 25% on countries purchasing oil or gas from Venezuela, initially pushing oil prices up. However, Black Sea maritime security deals involving the U.S. tempered the impact. In commodities, gold dipped slightly to $3,051.30, silver rose marginally to $34.19, and copper dropped 1.19%. Brent crude climbed 0.40% to $73.29 per barrel, supported by a U.S. crude stockpile drop. 

Source: Trading View, Analysis: Kalkine Group  

After breaching the upward trendline that had been in place since November 2024 and displaying signs of weakness, the S&P/NZX 50 index continues to break through a key support level formed by the neckline of a Head & Shoulders pattern, suggesting further downside potential. This weakness could drive the index toward strong support around 11,500 points before any signs of recovery emerge. Furthermore, the 14-day Relative Strength Index (RSI) remains below its midpoint, indicating a short-term negative market sentiment.   

Our Stance: It could be said that the strong buying in the healthcare sector somewhat supported the broader movement in the NZ market. In the FEU dated 21st March 2025, it was mentioned that after a pickup in consumer spending late last year, the momentum has slowed. Notably, February’s electronic card spending remained flat for the 2nd month in a row, despite spending in core retail industries – excluding fuel and vehicles – being up marginally after declining in January. Overall, the uncertainty related to tariffs and trade policies have been impacting the investors’ sentiments. Therefore, investors are required to consider the macroeconomic factors when it comes to investing in equities.