Orion Investment Managers MD and CIO, Adrian Meager, highlights market resilience despite volatility and geopolitics.
International markets demonstrated noteworthy resilience in February, navigating considerable volatility triggered by AI‑driven sentiment swings, disruptions across multiple industries and a persistently uncertain geopolitical and macroeconomic landscape. Despite these challenges, investors maintained selective risk appetite, enabling several markets to finish the month in positive territory.
United States
Uncertainty dominated the U.S. market environment. Geopolitical tensions between the United States and Iran intensified sharply, creating renewed investor caution. This was compounded by a significant political setback for President Trump as the U.S. Supreme Court ruled that ultimate authority over trade tariffs rests with Congress. In response, the President doubled down on an uncompromising tariff stance during his State of the Union address, further muddying the policy outlook.
The three major U.S. indices reflected this mixed backdrop:
- Dow Jones: +0.2%
- Nasdaq: –3.4%
- S&P 500: –0.8%
Economic data for the month added to the uncertainty. Headline inflation moderated to 2.4% Year-over-Year (YoY), while core inflation remained sticky at 2.5% YoY. Gross Domestic Product (GDP) growth in Q4 slowed sharply to 1.4% annualised, well below expectations. Core Personal Consumption Expenditure (PCE) rose to 3.0%, retail sales flattened and although consumer confidence rebounded, the Fed’s minutes again highlighted diverging views among policymakers regarding the path of interest rates.
United Kingdom
UK equity markets had a robust month, with the Financial Times Stock Exchange (FTSE) 100 Index rising 7.0% and reaching record highs. Inflation continued its downward trajectory, with headline Consumer Price Index (CPI) at 3.0% YoY and core CPI at 3.1% YoY. Despite marginal GDP growth of 0.1% in Q4, business investment contracted and services activity stagnated.
The Bank of England narrowly opted to maintain interest rates at 3.75%, acknowledging the gradual cooling in inflation despite persistent underlying pressures.
Europe
European markets delivered another strong performance, supported by improving capital flows and investor rotation away from U.S. mega‑caps.
- CAC 40: +5.6%
- DAX: +3.0%
Eurozone inflation continued to moderate, easing to 1.7% in January from December’s 1.9% print. Stronger economic indicators and a more diversified sectoral rally underpinned improved sentiment across the region.
Asia (Ex‑Japan)
Asian markets were mixed against a backdrop of policy anticipation and muted economic visibility. In China, expectations for further government stimulus helped lift the Shanghai Composite by 1.1%, whereas the Hang Seng fell 2.8%, reflecting continued investor caution toward Hong Kong‑listed counters.
Japan
Japan was the standout performer in the region, surging 10.4% for the month. Renewed investor confidence in consumer, financial and cyclical sectors drove strong inflows. Inflation fell sharply to 1.5%, dipping below the Bank of Japan's (BoJ) 2% target for the first time since 2022. Furthermore, Japan’s earlier tariff‑cap agreement with the U.S. (15% cap in exchange for US$550 billion investment) appears likely to remain intact following the recent U.S. Supreme Court ruling.
South Africa
Despite global volatility and ongoing commodity concerns, the Johannesburg Stock Exchange (JSE) extended its winning streak with the All Share Index (ALSI) rising 7%, marking the 12th consecutive month of gains. Sector performance was led by resources (+13.4%), followed by financials (+7.4%) and property (+6.3%). Industrials were broadly flat (–0.1%).
Stand-out shares on the upside, led by commodities, were PanAf Resources (up 31.9%), AngloGold (up 30.3%), Sasol (up 27.2%), Aspen (up 25.9%), WBHO (up 21.4%), and Nedbank (up 18.7%). Shares to highlight on the downside were Spar (down 21.3%) which dropped to levels last seen 2010 on the back of a trading update that rattled shareholders, Pick n Pay (down 19.2%), Prosus (down 11.6%), and Naspers (down 10.7%).
On the macroeconomic front, headline inflation eased to 3.5%, while core inflation edged up to 3.4%. Retail sales growth came in at 2.6% YoY and unemployment improved marginally to 31.4% in Q4 2025. February’s National Budget maintained a pragmatic fiscal approach, projecting the national debt to peak this year. Higher‑than‑expected mining revenues boosted collections by R21 billion, improving fiscal metrics and strengthening the case for further credit rating upgrades following S&P’s positive adjustment in November.
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