Selling in Industrials Sector Impacts NZ Market

Image Source : Krish Capital Pty Ltd

Index Update: On 29th April 2025, the broader NZ market closed the trading session in red amidst selling in the industrials sector. On the same day, S&P/NZX 50 Index witnessed a decline of 0.61% to end the session at 12,025.450 and S&P/NZX 20 Index fell by 0.75% to 7,119.470. Also, S&P/NZX 10 Index encountered a fall of 0.91% to 11,890.930. On the same day, industrials sector witnessed significant selling pressure, and S&P/NZX All Industrials fell by 1.58% to 2,073.120.  

Macro Update: Recently, Minister of Finance published the RBNZ’s Five Year funding agreement (FYFA). This sets the RBNZ’s core operating expenditure from 1 July 2025 through to 30 June 2030. Notably, the FYFA is placed at $750 Mn, while some of the elements of RBNZ’s spending have been excluded from the agreement. As per Board Chair Neil Quigley, the focus is towards ensuring economic wellbeing as well as prosperity for New Zealanders.   

Top Market Movers: Among top gainers, Rakon Limited (NZX: RAK) witnessed a rise of 16.33% to $0.57 per share. On the other hand, Rua Bioscience Limited (NZX: RUA) fell by 8.00%.  

Commodity Update: The dollar struggled to recover Tuesday as uncertainty lingered over progress in Sino-U.S. trade talks, with Treasury Secretary Scott Bessent stating China must initiate negotiations. Gold slipped 0.63% to $3,326.70, silver edged up 0.02% to $33.00, and copper dipped 0.06% to $9,392.05. Brent crude eased 0.04% to $65.63, pressured by a weak demand outlook and Russia's surprise three-day ceasefire with Ukraine, hinting at possible broader peace efforts. 

Source: Trading View, Analysis: Kalkine Group   

Following a break below the upward trendline that had held since November 2024 and showing signs of weakness, the S&P/NZX 50 index has continued to fall beneath a key support level — the neckline of a Head & Shoulders formation — suggesting the potential for further downside. This bearish momentum may push the index toward a major support zone around 11,500 points. At present, the index is showing an early sign of stabilization when forming lower highs and higher lows with a possible bullish divergence emerging on the 14-day Relative Strength Index (RSI) in its oversold territory. However, in order to signal a possible recovery, the index should manage to surpass its previous peak at 12,400 points.  

Our Stance: It could be said that the selling in the industrials sector impacted the broader NZ market on 29th April 2025. As per the release by RBNZ dated 9th April 2025, there have been discussions regarding developments in domestic economic activity. Notably, higher-than-anticipated export prices as well as a lower exchange rate helped primary sector incomes and broader economic growth. However, there are still uncertainties related to global trade and commodity prices continue to be volatile.