The NZX 50 dropped by 27 points, equivalent to a 0.2% decrease, to settle at 13,530 during Friday morning trading. This decline wiped out the previous day’s gains following an uptick in Q4 inflation, which has heightened expectations that the Reserve Bank of New Zealand (RBNZ) will maintain interest rates at their current levels for the foreseeable future. Recent figures revealed that New Zealand's annual inflation rate climbed to 3.1% in Q4, marking the highest increase since the second quarter of 2024. Previously, the RBNZ had reduced its official cash rate by a cumulative 100 basis points since August 2025 to bolster the economy. Market participants are now looking ahead to consumer and business confidence figures due next week, especially after improvements were recorded in the prior month. Despite the decline, a positive trading session on Wall Street overnight helped limit the drop, buoyed by diminishing global tensions and robust US economic data. The index saw significant pressure from the financials, energy, and communication services sectors, with Fletcher Building, Infratil, and Briscoe Group all experiencing declines of 1.3%, 1.3%, and 1.0%, respectively. As the week concludes, the index is on track for a 1.4% decline, marking its first weekly drop in a month.