NZX 50 Tumbles as Global Uncertainty Weigh on Markets

Index Update: On 9th March, the broader NZ market closed lower amidst strong sell-off. On the same day, S&P/NZX 50 Index witnessed a decline of 3.11% to end at 13,098.830 and S&P/NZX 20 Index fell by 3.08% to 7,418.760. Also, S&P/NZX 10 Index encountered a strong decline of 3.41%. Notably, energy sector witnessed strong selling pressure, with S&P/NZX All Energy falling by 4.86%.     

Macro Update: As per FEU dated February 26, the monthly selected price indexes (SPI) for January reflected elevated food price inflation. However, the pricing pressures in other categories were more subdued. Notably, declines in transport components, such as airfares and fuel, resulted in fall in annual rate of the basic composite index to 2.8% as compared to January 2025, from 4.1% in the December year.  

Market Movers: Among top gainers, New Talisman Gold Mines Limited (NZX: NTL) witnessed a rise of 13.33% to end at $0.017 per share. On the other hand, Air New Zealand Limited (NZX: AIR) fell by 7.84%.   

Commodity Update: The U.S. dollar strengthened on Monday, climbing to a three-month high against the euro as rising geopolitical tensions in the Middle East pushed investors toward safe-haven assets. Oil prices surged, with Brent crude jumping 23.00% to USD 114.36 per barrel, raising concerns over global inflation and higher interest rates. Meanwhile, commodities declined, with gold falling 1.15% to USD 5,100.35, silver dropping 2.24% to USD 82.57, and copper easing 0.84% to USD 12,765.00.  

Source: Charts by TradingView, Analysis: Kalkine Group  

In the latest session, the S&P/NZX 50 Index dropped sharply by 420.54 points, or 3.11%, to close at 13,062.56. Despite this decline, recent price action still points to a constructive short-term outlook for the benchmark, with key technical levels being the previous peak at 13,757.71, acting as resistance, and the prior trough at 13,022.30, serving as support. Meanwhile, the Relative Strength Index (RSI) has slipped below its midpoint, indicating that momentum has shifted into negative territory. Should the index break beneath its immediate support, it could trigger a short-term downward trend. In that scenario, the next support level lies near 12,873.07, corresponding to the May 2025 peak, where buying interest could potentially emerge and lead to a rebound.  

Our Stance: As of now, it seems that the broader US markets are reacting to escalating geopolitical tensions in the Middle East that have pushed oil prices sharply higher, fueling inflation fears and prompting investors to reassess growth expectations and Federal Reserve policy. Coming to the NZ market, The S&P/NZX 50 is under pressure, reflecting a short-term decline in the past month. The global market weakness and geopolitical tensions are hurting investor sentiment. At the same time, mixed domestic economic signals and cautious outlook on interest rates are keeping investors risk-averse. Moving forward, the investor sentiment in New Zealand equities could remain fragile amid ongoing global uncertainty.