Image Source : Krish Capital Pty Ltd

Index Update: On 20th February 2025, the broader NZ market witnessed a significant sell-off amidst decline in the consumer discretionary sector. On the same day, S&P/NZX 50 Index witnessed a fall of 1.17% to end the session at 12,880.360 and S&P/NZX 20 Index declined by 1.22% to 7,743.860. Also, S&P/NZX 10 Index fell by 1.55% to 12,800.240. S&P/NZX All Consumer Discretionary witnessed a fall of 3.16% to 775.870. However, S&P/NZX All Consumer Staples rose by 1.32%.  

Macro Update: Stats NZ stated that, in the year ended June 2024, ~31% of households in the lowest 2 income quintiles spent 40% or more of their income on housing costs (31.7% of households in the lowest income quintile (under $41,600) and 31% for those in the second income quintile ($41,600 to $69,999)). Notably, households spent an average of $22.20 per $100 of income on housing costs, up from $20.80 in 2019. 

Top Market Movers: Among top gainers, Blis Technologies Limited (NZX: BLT) witnessed a rise of 6.67% to $0.016 per share. On the other hand, Greenfern Industries Limited (NZX: GFI) declined by 8.33% 

Commodity Update: The yen strengthened while the U.S. dollar remained steady as investors digested U.S. President Donald Trump's latest tariff proposals and their potential global economic impact. This also raised questions about future interest rate decisions by major central banks. Geopolitical tensions rose as Trump labelled Ukrainian President Volodymyr Zelenskyy a "dictator" amid ongoing peace talks between Russia and Ukraine. In commodities, gold rose 0.65% to $2955.80, silver gained 0.56% to $33.23, and copper increased 0.48% to $9490.00. Meanwhile, Brent oil dropped 0.30% to $75.83, weighed down by an unexpected rise in U.S. crude oil inventories. 

A graph with lines and numbers AI-generated content may be incorrect.

Source: Trading View, Analysis: Kalkine Group   

In July 2024, the S&P/NZX 50 index surpassed both the neckline of a Head and Shoulders pattern on the daily chart and a key resistance level marked by its 2023 high. This breakout indicates that the uptrend, which started in November 2023, is likely to persist and could push the index toward its historical peak from 2021. Despite the ongoing correction, the index is forming a symmetrical triangle pattern, anticipating a continuation of the prevailing uptrend. Meanwhile, the 14-day Relative Strength Index (RSI) is heading north from its midpoint, reflecting neutral market sentiment in the short-term.  

Our Stance: It could be said that the broader NZ market was impacted by the sell-off in the consumer discretionary sector. Recently, RBNZ published a media release, highlighting that The Monetary Policy Committee decided to lower the OCR by 50 bps to 3.75%. Notably, annual CPI remains near the midpoint of the Monetary Policy Committee’s 1% - 3% target band. However, the broader NZ economy remains exposed to the risks related to global macroeconomic factors.  

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