NZ Markets Gain as RBNZ Holds Rate, Optimism Rises

Index Update: On 8th April, the NZ market ended higher amidst strong buying in materials sector, with S&P/NZX 50 Index witnessing a rise of 1.41% to end at 13,253.940 and S&P/NZX 20 Index increasing by 1.26% to 7,480.200. On the same day, S&P/NZX 10 Index witnessed a rise of 1.35% to end at 12,886.090. Notably, S&P/NZX All Materials rose by 3.46% to end at 935.820.   

Macro Update: The Monetary Policy Committee decided to keep the OCR steady at 2.25%. Since the February Monetary Policy Statement, developments in the Middle East have significantly changed the outlook and shifted the balance of risks for New Zealand’s inflation and economic growth. In the short term, inflation is projected to rise while the economic recovery is likely to slow.   

Market Movers: Among top gainers, Tourism Holdings Limited (NZX: THL) witnessed a rise of 8.61% to end at $2.27 per share. On the other hand, Locate Technologies Limited (NZX: LOC) declined by 11.11% to end at $0.04 per share.  

Commodity Update: Asian markets rallied on Wednesday after U.S. President Donald Trump said he had agreed to a two-week ceasefire with Iran, pushing the dollar to its lowest level in a month. The euro, yen, Australian dollar and New Zealand dollar strengthened. Gold jumped 2.215% to USD 4,834.05, silver climbed 6.34% to USD 76.55, and copper rose 2.57% to USD 12,660.00. Brent crude tumbled 15.00% to USD 94.59 on easing supply fears.  

Source: Charts by TradingView, Analysis: Kalkine Group   

In the latest trading session, the S&P/NZX 50 Index extended its recovery from the recent trough, advancing 184.28 points, or 1.41%, to close at 13,253.95. Additionally, the 14-period RSI has risen above its midpoint after forming a bullish divergence relative to price action, signalling that downside momentum has eased and that near-term sentiment is shifting from neutral toward a more constructive outlook. Despite this improvement, the index continues to trade below the key resistance level at 13,339.06, which corresponds to the mid-March high, indicating that the recovery may be corrective rather than the start of a sustained uptrend. From a technical perspective, a decisive and sustained breakout above 13,339.06, ideally accompanied by increased trading volume, would be required to invalidate the current bearish bias and signal a potential trend reversal.  

Our Stance: As of now, the US stocks remain mixed and cautious, with traders weighing geopolitical developments and inflation expectations. Oil prices have plunged sharply after a reported ceasefire, easing energy cost pressure on markets and boosting broader sentiment. Coming to the NZ markets, investor sentiment was buoyed by the RBNZ’s decision to hold the OCR, which helped keep markets firm following global rate news. However, broader caution persists due to global economic uncertainty and elevated fuel costs affecting freight and transport sectors.