NZX 50 index

IBISWorld forecasts the NZX 50 index to trend upwards by 4.2% in 2025-26, to average 12,914.2 index points. This growth stems mainly from low interest rates, economic recovery, and the structure of the index. Reserve Bank of New Zealand (RBNZ) projections currently indicate that the OCR will remain well below its 2023-24 peak through 2026. However, the Bank emphasises that this path is highly uncertain and not a commitment, particularly given the drastic decline in the OCR from 5.5% in July 2024 to 2.25% as of November 2025. However, with the expectation of the OCR remaining low through 2025-26, this supports sectors like healthcare, utilities and infrastructure by making their dividends more attractive. Since these defensive sectors comprise a significant portion of the index, the NZX 50 is likely to benefit as long as rates remain low and growth resumes. The Organisation for Economic Co-operation and Development (OECD) also expects New Zealand's economy to improve, citing factors like stronger tourism and steady export demand. As these conditions boost the economy, businesses are likely to see better earnings, which should ultimately contribute to growth in the index.

The onset of the pandemic disrupted a decade of high and continuous growth in the NZX 50 index, a situation primarily related to very low interest rates. Record high prices in the domestic sharemarket have followed a wider trend in asset prices in New Zealand over the period. Real GDP has continued to appreciate over most of the period, which has contributed to a strong performance in the local sharemarket. Nonetheless, the NZX 50 came under pressure in the early stages of the pandemic. Faced with an uncertain situation, the RBNZ cut interest rates to record lows in March 2020, a situation which persisted until October 2021. This period of hyper-low interest rates, followed an extended five-year period of low-interest rates, led many investors to seek higher yields, which pushed them towards equity markets. On the other hand, New Zealand has become an increasingly attractive place to invest, viewed as a secure and open economy, that has a business-friendly environment. This dynamic was temporarily halted by a sharp rise in inflation and interest rates in 2022-23, which tanked investment in the share market. As these conditions slowly stabilised, growth in the NZX 50 index has followed. Overall, IBISWorld forecasts the NZX 50 index to rise at a compound annual rate of 1.6% over the five years through 2025-26.