Global and local markets delivered another strong month in October, defying the typical “October effect”. Investor sentiment was supported by a 25bps rate cut from the US Federal Reserve and easing trade tensions between the US and China. The MSCI World Index rose 2.0%, taking its year-to-date gain above 20%. Locally, the JSE recorded its eighth straight monthly advance, led by robust performances from the financial and property sectors.
LOCAL MARKETS
Exhibit 1 | Local Performance (ZAR) for October 2025
Source: Factset. Data as at 31 October 2025. Past performance is not indicative of future performance. For illustrative purposes only and not indicative of any investment.
South Africa
Economy
South Africa’s economy continued to show encouraging signs of improvement in October. Inflation edged slightly higher, with headline consumer prices rising to 3.4% year-on-year in September from 3.3% in August, while core inflation increased to 3.2%. Importantly, South Africa was officially removed from the Financial Action Task Force (FATF) grey list during the month, following significant progress on governance and anti-money laundering reforms. This development is expected to bolster foreign investor confidence and improve the country’s risk profile over time. Local policy momentum also remained steady, with the Phase 2 Operation Vulindlela progress report showing that nearly half of the government’s structural reform initiatives are on track.
Equity Markets
The South African equity market recorded another month of positive returns, although sector performance diverged sharply. The FTSE/JSE All Share Index gained 1.6%, while the Capped SWIX advanced 1.8%. The market leadership shifted notably in October as resource stocks retreated, and domestically focused counters took the lead. The Financial 15 Index surged 8.4%, its strongest monthly performance since mid-2024, while Listed Property gained 7.8%. Industrials rose 1.7%, and Resources declined by 5.4%, marking their first monthly drop since February.
Financials benefited from stronger earnings updates and renewed confidence in South Africa’s economic outlook. Capitec rose 11.1% after reporting 26% year-on-year earnings growth and continued expansion in its business banking segment. In comparison, Discovery advanced 11.6% on the back of a favourable claims environment and healthy new business volumes.
In contrast, mining counters, which have driven most of the JSE’s gains this year, lost steam amid profit-taking and late-month volatility in precious metals. Impala Platinum fell 15.5% after reporting a dip in quarterly production volumes, while Valterra Platinum and DRDGold both declined sharply. Mondi Plc dropped 18.3% following disappointing earnings and weaker paper demand.
Best performers:
- MTN Group: 19.26%
- Growthpoint: 15.02%
- Discovery: 11.57%
- Capitec: 11.08%
- Nedbank: 10.61%
Worst performers:
- Mondi Plc: -18.29%
- Implats: -15.48%
- Valterra Platinum Ltd: -13.06%
- Harmony Gold Mining: – 7.02%
- Gold Fields Ltd: – 7.00%
Bond Market:
South African bonds continued to perform well as yields moved lower across the curve. The FTSE/JSE All Bond Index (ALBI) returned 2.6% in October, bringing year-to-date gains to nearly 17%. Long-dated government bonds led the rally, with the yield on the R2048 falling by 35 basis points during the month. The combination of contained inflation, progress on fiscal reforms, and improved investor sentiment supported the bond market.
The local bond rally was further buoyed by South Africa’s removal from the FATF grey list and foreign inflows returning to domestic debt. The rand was marginally weaker, depreciating by 0.4% against the US dollar to close October at R17.33/USD, although it remains 8% stronger for the year to date.
GLOBAL MARKETS
Global markets rose in October as rate cuts, solid earnings, and easing US-China tensions boosted sentiment. The MSCI World gained 2.2%, and emerging markets outperformed, led by tech and commodity strength. The US and Europe advanced on resilient growth, Japan surged on stimulus hopes, while China was mixed amid slower data. Commodities were mixed, and the US dollar strengthened slightly.
Exhibit 2 | Global Performance (base currency) October 2025
Source: Factset. Data as at 31 October 2025. Past performance is not indicative of future performance. For illustrative purposes only and not indicative of any investment.
United States
US equity markets extended their strong year-to-date performance in October, supported by robust corporate earnings, optimism around artificial intelligence, and expectations of further monetary easing. The S&P 500 gained 2.3%, the Dow Jones Industrial Average rose 2.6%, and the Nasdaq Composite outperformed with a 4.8% gain. The Federal Reserve cut interest rates by 25 basis points to a range of 4.0% – 4.25%. While Chair Jerome Powell cautioned that additional easing in December was “not a foregone conclusion,” investors welcomed the move as a signal of policy flexibility.
Technology stocks once again led market performance. Alphabet and Amazon rose 16% and 11%, respectively, after reporting strong cloud and AI-driven revenue growth, while Meta fell 12% as its heavy AI infrastructure investments weighed on profitability. Inflation data was slightly firmer, with headline CPI rising to 3.0% year-on-year and core CPI steady at 3.0%. Despite a prolonged government shutdown, investor sentiment remained buoyant as US-China trade tensions eased following a partial agreement to reduce tariffs and resume agricultural exports.
Europe
European markets delivered modest gains in October, with earnings season providing support. The Euro Stoxx 50 Index rose 2.5%, France’s CAC 40 advanced 2.9%, and Germany’s DAX gained 0.3%. Eurozone inflation moderated slightly to 2.1% year-on-year, while GDP for the third quarter grew by 0.2%, exceeding expectations. The European Central Bank left interest rates unchanged but reiterated that policy would remain restrictive until inflation was firmly back at target.
United Kingdom
In the United Kingdom, the FTSE 100 gained 4.1%, lifted by stronger oil and financial shares, as well as solid corporate earnings from major blue-chip companies. The index reached a new record high during the month, supported by rising energy prices and improving investor sentiment. Inflation remained elevated at 3.8% year-on-year, marking the third consecutive month at this level, while core inflation eased slightly to 3.5%.
Asia
Asian markets posted mixed results. Japan’s Nikkei 225 Index surged 16.7%, its strongest monthly performance in 35 years, as the election of new Prime Minister Sanae Takaichi raised expectations for fresh fiscal stimulus and higher defence spending. The rally underscored growing investor confidence in Japan’s corporate and policy outlook.
China’s markets were more subdued, with the Shanghai Composite rising 2.0% and the Hang Seng Index falling 3.5%. Although progress on trade relations with the US improved sentiment, economic data remained mixed. Third-quarter GDP growth slowed to 4.8% year-on-year, while manufacturing activity continued to contract slightly. Nonetheless, resilience in exports and continued policy support helped stabilise investor confidence.
Emerging Markets
Emerging markets outperformed developed peers, with the MSCI Emerging Markets Index rising 4.2% in October and 33.6% year-to-date. The rally was driven by strong performances from Asian technology exporters such as TSMC, Samsung, and SK Hynix, which benefited from the global boom in AI infrastructure investment. Commodity-linked economies, including Brazil and South Africa, also contributed positively, supported by firm metal prices and improving trade balances.
Commodities and Currencies
Commodities produced mixed results in October. Gold prices rose 3.7%, rebounding after a sharp mid-month correction from record highs above US$4,300 per ounce. Platinum was largely unchanged, while palladium and rhodium gained 14.1% and 15.1%, respectively. Oil prices softened, with Brent crude falling 2.9% to around US$65 per barrel amid expectations of higher OPEC+ output. Iron ore prices increased 4% on continued strong Chinese demand.
The US dollar strengthened 2.1% against major peers following the Fed’s cautious tone, while emerging market currencies, including the rand, experienced mild weakness.
Outlook
Market performance in October reflected a healthy rotation within South African equities, as domestic sectors regained leadership after months of resource-driven gains. The continued strength in financials and property signals improving confidence in the local economy, while the removal from the FATF grey list should further enhance sentiment and attract capital inflows.
Globally, monetary easing, resilient growth, and the sustained momentum in technology and AI spending continue to underpin risk assets. However, investors should remain mindful of elevated valuations, uneven economic data, and persistent geopolitical uncertainties.
As the year nears its end, diversification and disciplined portfolio positioning remain essential for navigating markets that are strong but increasingly sensitive to interest-rate expectations and shifting growth dynamics.
