Selling in the Industrials Sector Weighs Over NZ Market

Image Source : Krish Capital Pty Ltd

Index Update: On 19th June 2025, the broader NZ market closed lower amidst significant selling in the industrials sector. On the same day, S&P/NZX 50 Index witnessed a fall of 0.46% to end at 12,569.050 and S&P/NZX 20 Index encountered a decline of 0.63% to 7,390.370. Also, S&P/NZX 10 Index declined by 0.83% to 12,364.680. Notably, S&P/NZX All Industrials witnessed a fall of 1.29% to 2,208.070. However, S&P/NZX All Information Technology increased by 2.17%.   

Macro Update: As per Stats NZ, NZ’s gross domestic product (GDP) increased by 0.8% in the March 2025 quarter, after the 0.5% rise in the quarter ended December 2024. As per the release, the activity rose in the March 2025 quarter throughout all 3 high-level industry groups: primary industries, goods-producing industries as well as services industries. Notably, the increase in manufacturing was led by higher production of machinery and equipment.   

Top Market Movers: Among top gainers, Me Today Limited (NZX: MEE) witnessed a rise of 9.09% to $0.072 per share. On the other hand, KMD Brands Limited (NZX: KMD) fell 6.78%.   

Commodity Update: The dollar held firm Thursday amid Fed Chair Powell’s cautious inflation stance and rising Middle East tensions, keeping market sentiment fragile. The Fed kept rates unchanged, signalling possible cuts later this year, though consensus was mixed. Gold slipped 0.42% to $3,393.75, silver fell 0.36%, and copper edged down 0.10%. Brent crude declined 0.48% to $76.33 as uncertainty over U.S. action in the Israel-Iran conflict weighed on investors.  

Source: Trading View, Analysis: Kalkine Group   

Following a sustained upward rally that began in October 2023, the S&P/NZX 50 index appears to be transitioning into a consolidation phase. This is evidenced by the formation of a lower high and a higher low on the chart - typically a technical signal that the market may be entering a trading range. Unless there is a clear breakout above the previous resistance level at 12,881 points or a breakdown below the earlier support level at 12,254 points, this sideways movement is expected to persist in the near term. Additionally, the 14-day Relative Strength Index (RSI) is currently hovering around its midpoint, which reinforces the previous outlook. As a result, investors may need to wait for a decisive move in either direction before gaining greater clarity on the market’s next trend.   

Our Stance: It could be said that selling in the industrials sector somewhat impacted the broader NZ market on 19th June. Moving forward, the global and NZ equity markets are expected to be impacted by geopolitical tensions and cautious inflation outlook. RBNZ recently stated that the NZ economy continues to recover after a period of contraction. Increased commodity prices, together with lower rates, are helping broader economic activity.