NZX 50 Ends in Red

Image Source : Krish Capital Pty Ltd

Index Update: On 19th March 2025, the S&P/NZX 50 Index ended the trading session in red as the index fell by 0.26% to end at 12,045.930 and S&P/NZX 20 Index witnessed a fall of 0.42% to close at 7,162.560. However, S&P/NZX 10 Index witnessed a marginal rise of 0.09%. On the same day, significant selling was encountered in the materials sector and S&P/NZX All Materials declined by 1.72%. S&P/NZX All Energy fell by 1.54%.  

Macro Update: The seasonally adjusted current account deficit narrowed to $5.9 Bn in the December 2024 quarter, as per Stats NZ. The current account deficit was $475 Mn narrower than the previous quarter because of an increase in the value of services exports (up $688 Mn) as well as goods exports (up $669 Mn). The spending by overseas visitors while in New Zealand led the rise in services exports, while dairy as well as meat led the rise in goods exports.  

Top Market Movers: Among top gainers, Pacific Edge Limited (NZX: PEB) witnessed a rise of 4.07% to end at $0.128 per share. On the other hand, New Talisman Gold Mines Limited (NZX: NTL) declined by 4.08% to $0.047 per share. 

Commodity Update: The yen fluctuated between losses and gains on Wednesday after the Bank of Japan (BOJ) kept interest rates unchanged, as expected. Meanwhile, the dollar struggled to regain strength ahead of the Federal Reserve’s policy decision. In the commodities market, gold rose 0.06% to $3,042.50, after reaching an all-time high on Tuesday. Silver dropped 0.57% to $34.69, and copper fell 0.15% to $9,901.00. Brent crude declined 0.20% to $70.44 following an agreement between Russia and U.S. President Trump to halt attacks on each other's energy infrastructure temporarily, potentially allowing more Russian oil in global markets. 

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 seems that the selling in the materials sector somewhat impacted the broader NZ market on 19th March. Considering the global market volatility, the outlook for the global and NZ market remains cautious, mainly due to the fluctuating commodity prices as well as geopolitical tensions. Therefore, investors are required to assess macro-economic data points when it comes to equity investments. On 21st March, Stats NZ would be releasing data about overseas merchandise trade (February 2025).