Selected Market Indicators for Periods to 31 January 2026

In January, the New Zealand share market declined by 0.9%, lagging international markets even though the economic data was positive.

Globally, overseas shares rose by 1.7%, supported by positive investor sentiment as companies began reporting strong earnings for the fourth quarter of 2025. Emerging market equities started the year on a strong note, outperforming developed markets. Within the stock market, value stocks and smaller companies showed better performance than growth stocks. Australian shares also gained 1.7%, with the energy sector leading the way due to geopolitical tensions that pushed energy prices higher.

Bond market performance was mixed during February as strong economic data, US Federal Reserve independence and geopolitical concerns continue to weigh, and investors shift to high quality assets. Emerging market local currency debt outperformed global developed market government bonds, up 1.4% verses 1.2%.  In Europe, French and Italian government bonds performed relatively well, returning about 1.0% and 0.7% as regional investor confidence improved.

On the economic front, New Zealand’s consumer confidence reached its highest level since 2021, reflecting growing optimism among households. The manufacturing sector showed expansion, with the Purchasing Managers’ Index, which is a key monthly economic indicator based on surveys of supply chain managers about new orders, production, jobs, and deliveries; indicated solid growth and strong new orders. Inflation in New Zealand edged slightly above the Reserve Bank’s target, driven mainly by tradable goods affected by international market conditions.

Significant Developments for January:

• Globally, economic growth is forecast to remain resilient, with inflation pressures easing but core inflation expected to stay somewhat sticky. Emerging markets are viewed positively due to supportive monetary and fiscal policies and generally low inflation.
  
  
• The New Zealand economy is expected to continue strengthening throughout 2026, supported by rising consumer confidence and lower interest rates. However, the Reserve Bank of New Zealand may pause rate changes temporarily to assess inflation trends and economic data.