Markets softer ahead of key economic data releases

Global markets showed a cautious tone on Monday, with investors weighing economic data and mixed sector signals across regions. In South Africa, equities closed softer as domestic benchmarks reflected cautious positioning ahead of key economic releases. The FTSE/JSE All Share Index eased toward the 120 000 level — a notable psychological threshold following recent gains— as sector performance diverged. Resource counters came under pressure amid mixed commodity signals, while industrial and consumer shares also underperformed, collectively weighing on the broader index and pulling it into negative territory. Although parts of the financial sector demonstrated relative resilience, the gains were insufficient to counterbalance weakness elsewhere in the market. On the currency front, the rand weakened modestly against the dollar, with the local currency settling around R15.99 — approximately 0.20% softer than Friday’s close — in the absence of a clear near-term catalyst. The largely range-bound session underscored investor caution ahead of SA’s fourth-quarter 2025 employment data, due later today, which is expected to provide important insight into the economy’s underlying momentum. With limited directional cues from the US dollar or broader global risk sentiment, both the rand and local equities remained anchored to data expectations rather than decisive capital flows.

European stock markets closed mixed, extending last week’s subdued momentum as investors weighed the impact of a firmer euro alongside expectations that base rates will remain unchanged in the near term. The Euro STOXX 50 ended broadly flat at 5 985 points, while the pan-European STOXX Europe 600 added 0.10% to 618, holding just below the record high reached last week. Trading volumes were thinner due to public holidays in the US and China, although volatility persisted in industrial heavyweights amid ongoing uncertainty around the disruptive impact of artificial intelligence. Technology-related names remained under pressure, as concerns over displacement from AI-driven automation tools continued to weigh on sentiment. Trading Economics reports that Dassault Systèmes tumbled nearly 10% following broker downgrades, while infrastructure-focused groups Siemens and Schneider Electric fell 6.40% and 4%, respectively. By contrast, financials provided a measure of support. Lenders Banco Santander, BBVA and Nordea each gained more than 2%, helping to anchor the broader benchmark.

Japanese equities extended their pullback at the start of the week, pressured by softer-than-expected fourth-quarter growth data. The Nikkei 225 declined 0.24% to close at 56 806 points, while the broader TOPIX shed 0.82% to 3 787, marking a second consecutive session of losses. Data showed the economy expanded by 0.10% quarter-on-quarter in 4Q25, recovering from a 0.70% contraction in the previous quarter but undershooting market expectations for a 0.40% increase, tempering optimism around the pace of Japan’s recovery. On the policy front, Prime Minister Sanae Takaichi reiterated her commitment to supporting growth through proactive fiscal stimulus following her decisive victory in the 8 February 2026 Lower House election. Sector performance was broadly negative, with financials leading the decline. In corporate developments, medical equipment manufacturer Olympus Corporation slumped 12.90% after cutting its full-year operating income guidance, citing ongoing product safety challenges and the impact of restructuring measures.

Commodity prices showed a generally soft tone amid light trading conditions as markets were affected by public holidays in the US and China, thin liquidity, and profit-taking activity, particularly in precious metals. Brent and WTI crude held above key psychological levels but lacked strong directional drivers, while base and precious metals edged lower on the session.