Selling in Materials Sector Weighs Over Broader NZ Market

Index Update: On 20th March, the broader NZ market ended lower amidst sell-off in the materials sector. On the same day, S&P/NZX 50 Index witnessed a decline of 0.47% to end at 12,989.990 and S&P/NZX 20 Index fell by 0.44% to close at 7,326.380. Also, S&P/NZX 10 Index encountered a fall of 0.73% to 12,450.040. Notably, materials sector witnessed strong sell-off, with S&P/NZX All Materials declining by 3.58%.   

Macro Update: Stats NZ released data about overseas merchandise trade (February 2026). In February 2026, goods exports increased $27 Mn (or 0.4%) to $6.6 Bn, and goods imports went up by $728 million (12%) to $6.9 Bn compared to February 2025. The monthly trade balance was a deficit of $257 Mn. With respect to exports, milk powder, butter, and cheese declined $105 Mn (or 4.8%) to $2.1 Bn.   

Market Movers: Among top gainers, EROAD Limited (NZX: ERD) witnessed a rise of 4.94% to end at $0.85 per share. On the other hand, WasteCo Group Limited (NZX: WCO) declined by 18.18% to $0.009 per share.   

Commodity Update: The dollar retreated from multi-month highs as rising energy prices reshaped global rate expectations, leaving the U.S. Federal Reserve as the only major central bank unlikely to hike rates this year. Earlier expectations of two rate cuts have faded. Gold jumped 2.45% to USD 4,719.10, silver rose 4.18% to USD 74.13, and copper gained 0.86% to USD 12,297.70, while Brent crude declined 2.00% to USD 116.48.  

Source: Charts by TradingView, Analysis: Kalkine Group   

The S&P/NZX 50 Index fell by 61.60 points, or 0.47%, in the latest trading session to close at 12,990.00. This decline strengthens the earlier bearish signal, highlighted by the formation of a Bearish Engulfing candlestick pattern. The index has also broken below its previous trough, moving out of the prior trading range and confirming a short-term downtrend characterized by a sequence of lower highs and lower lows. In addition, the Relative Strength Index (RSI) is drifting lower from its midpoint, indicating that momentum is transitioning from neutral to a more negative bias. Immediate support is now located at the May 2025 peak of 12,887.80, where buying pressure may emerge, potentially triggering a rebound before the market establishes its next directional move. 

Our Stance: As of now, the US markets are currently volatile and cautious, with investors rotating between sectors rather than driving broad gains. Rising oil prices and geopolitical tensions are lifting inflation risks, keeping interest rates higher for longer. Overall, growth remains resilient, but upside is limited by cost pressures and policy uncertainty. Coming to the NZ equities, the broader market shows weak but stabilizing economic growth, with cautious consumer and investor sentiment.