Selling in the Materials Sector Weighs Over Broader NZ Market

Image Source : Krish Capital Pty Ltd

Index Update: On 18th July 2025, the broader NZ market ended the trading session in red amidst selling in the materials sector. On the same day, S&P/NZX 50 Index witnessed a decline of 0.19% to end at 12,880.400 and S&P/NZX 20 Index fell by 0.10% to 7,558.880. Also, S&P/NZX 10 Index declined by 0.23%. Notably, significant selling was witnessed in the materials sector and S&P/NZX All Materials fell by 2.59% to end at 970.250.  

Macro Update: As per RBNZ, The Monetary Policy Committee noted the risk that large economic policy shifts overseas, as well as concerns related to the sovereign risk, might result in the additional financial market volatility and higher bond yields. In the recent meeting, the Committee agreed to hold the OCR at 3.25%. Alsp, the elevated export prices and reduced interest rates continue to support a recovery in the broader NZ economy.   

Top Market Movers: Among top gainers, Third Age Health Services Limited (NZX: TAH) witnessed a rise of 10.67% to end at $4.15 per share. On the other hand, General Capital Limited (NZX: GEN) fell by 7.46%.   

Commodity Update: The dollar was poised for a second consecutive weekly gain, supported by strong U.S. economic data, suggesting the Federal Reserve may delay further rate cuts. Gold dipped 0.05% to $3343.60, while silver rose 0.62% to $38.54 and copper advanced 0.51% to $9,723.65. Brent crude inched up 0.04% to $69.48 amid concerns over potential Iraqi oil supply disruptions and uncertainty surrounding U.S. tariff policy, which is impacting demand.  

Source: Trading View, Analysis: Kalkine Group   

After experiencing a period of consolidation that followed a sustained upward rally beginning in October 2023, the S&P/NZX 50 index broke decisively above a key resistance level at 12,881 points - an area previously marked by its former peak. This breakout suggests renewed bullish momentum in the market and signals the potential for further upside movement. If the current trend continues, the index may be poised to retest its most recent high, which lies around the 13,250 points. Supporting this bullish outlook, the 14-day Relative Strength Index (RSI) is currently trending upward from the midpoint, indicating strengthening market momentum and improving investor sentiment.  

Our Stance: It could be said that the selling in the materials sector somewhat impacted the broader NZ market on 18th July. As of now, the broader global markets are being affected by the earnings results. The robust results from the companies tend to positively impact the investors’ sentiments, pointing to the possibility that they can navigate the tariff-related uncertainty. Apart from the earnings data, the investors are required to closely track the macro-economic data points, which can also influence the global and NZ markets.