Image Source : Krish Capital Pty Ltd

Index Update: On 13th May 2025, robust buying momentum in the materials sector supported the broader NZ market. On the same day, S&P/NZX 50 Index witnessed a rise of 0.87% to end the session at 12,786.740 and S&P/NZX 20 Index increased 0.68% to close at 7,572.280. Also, S&P/NZX 10 Index encountered a rise of 0.80% to close at 12,655.560. Notably, strong buying was witnessed in the materials sector, and S&P/NZX All Materials increased by 4.09%.   

Macro Update: As per the Financial Stability Report (May 2025), the banks have increased financial buffers in order to manage losses. Notably, profitability is strong as well as bank capital ratios continued to witness a rise. Also, the general insurers witnessed reduced claims over the previous year, with moderation in replacement costs. Furthermore, they have been implementing risk-based pricing more widely. Overall, the conditions in global reinsurance markets are more favourable.  

Top Market Movers: Among top gainers, WasteCo Group Limited (NZX: WCO) witnessed a rise of 11.11% to end the session at $0.02 per share. On the other hand, Being AI Limited (NZX: BAI) declined by 7.98% to $0.15 per share.   

Commodity Update: The dollar remained firm Tuesday after the U.S. and China agreed to a 90-day tariff truce, easing trade war tensions and boosting market sentiment. The deal sparked a global relief rally, lifting stocks and commodities. Gold rose 0.20% to $3,234.50, silver jumped 0.95% to $32.93, and copper increased 0.29% to $9,511.40. However, Brent crude slipped 0.20% to $64.82 amid the improving trade outlook. 

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Source: Trading View, Analysis: Kalkine Group   

After a correction, the S&P/NZX 50 broke above its previous peak of 12,400 points and crossed the 50-day simple moving average, a key trend-following indicator - suggesting a potential recovery is underway. Additionally, in its most recent session, the index broke above the upward trendline that has been in place since October 2023, near the 12,750-point level, reinforcing the previous outlook. Moreover, the 14-day Relative Strength Index (RSI) is rising above the midpoint, indicating a positive market sentiment.   

Our Stance: It could be said that the robust buying in the materials sector somewhat supported the broader NZ markets. The optimism in the broader US markets was visible on 12th May 2025 after the positive development related to the US-China trade deal. On 12th May, NASDAQ Composite Index witnessed a rise of 4.35% to end at 18,708.34. The momentum was also supported by hopes that the economy might not go into recession. While there can be some favourable short-term momentum, the persistent geopolitical risks require caution from the market players.  

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