NZX 50 Index Ends Marginally Higher

Image Source : Krish Capital Pty Ltd

Index Update: On 24th March 2025, the S&P/NZX 50 Index closed the session marginally higher, with the index increasing 0.12% to end the session at 12,128.210. On the same day, S&P/NZX 20 Index and S&P/NZX 10 Index increased by 0.31% and 0.60%, respectively. Also, utilities sector ended in green as S&P/NZX All Utilities witnessed a rise of 1.13% to end at 3,333.330. However, S&P/NZX All Energy encountered a decline of 1.57% to 1,684.110.  

Macro Update: As per FEU dated 7 March 2025, the signs of slower US growth have been impacting the financial markets. Also, the release highlighted that real consumer spending declined 0.5% in January, much lower than anticipated, alongside softer housing market indicators. Notably, there were also signs of consumer caution in surveys from the Conference Board as well as the University of Michigan, which showcased worries related to inflation, tariffs and jobs. However, the surveys of business sentiment remained mixed.  

Top Market Movers: Among top gainers, New Talisman Gold Mines Limited (NZX: NTL) witnessed a rise of 8.62% to end the session at $0.063 per share. On the other hand, Synlait Milk Limited (NZX: SML) declined by 10.89% to $0.90 per share. 

Commodity Update: The dollar dipped just below a three-week high against major currencies on Monday as traders awaited clarity on President Donald Trump’s upcoming tariff decisions. The greenback has struggled this year, with initial expectations of pro-growth policies shifting to concerns over Trump's aggressive trade stance, potentially sparking a recession. In commodities, gold rose 0.05% to $3,049.80, silver gained 0.59% to $33.67, and copper climbed 0.65% to $9,935.20. However, Brent crude slipped 0.40% to $71.88 as markets prepared for potential tariff announcements and kept an eye on ongoing Russia-Ukraine peace talks. 

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: While the broader global markets are expected to be influenced by the news related to the tariffs and trade policies, the investors’ sentiments might also get affected by earnings releases. Apart from these factors, the global and NZ investors are required to track the macroeconomic updates which can influence the US Fed’s decision related to interest rates. Notably, PCE reading is expected to be released on 28th March. Overall, due to broader economic uncertainty, mainly with the global issues like the US administration's policies, the investors are required to maintain a cautious stance.