Oracle cuts outlook as Q3 guidance misses and 2026 capex jumps by $15 billion amid AI cloud buildout

South Africa

South African equities firmed on Wednesday, with the Top 40 rising 0.35% to 103,462.95 points and the All Share up 0.28% at 111,042.85 points. October retail sales increased 2.9% year on year, signalling resilient consumer spending. Trade uncertainty persisted as the U.S. House considered renewing its flagship African trade programme, with South Africa facing potential exclusion amid strained relations with Washington. Corporate activity was robust: Mr Price agreed to acquire German value retailer NKD for up to €487 million, while Transnet finalised a 25-year concession with ICTSI to upgrade Durban Container Terminal Pier 2.

Europe

European markets were broadly flat as investors awaited the Federal Reserve’s rate decision and assessed mixed regional data. The STOXX 600 ended unchanged, while Germany and Spain posted modest declines. ECB President Christine Lagarde signalled potential upward revisions to eurozone growth forecasts, reflecting economic resilience. UK housing indicators softened, with new buyer enquiries marking their weakest reading since September 2023 following tax changes announced in the recent budget. The slowdown highlighted cautious sentiment across higher-value property segments. Overall, trading remained range-bound as investors balanced monetary-policy uncertainty with subdued sector-specific developments.

United States

U.S. equities closed higher after the Federal Reserve delivered a widely expected 25-basis-point rate cut while signalling a pause in further easing until clearer labour-market and inflation signals emerge. Updated projections showed policymakers still anticipate another cut in 2026 and upwardly revised GDP expectations. Markets interpreted Chair Jerome Powell’s comments—highlighting downside risks to employment and a desire to avoid suppressing job creation—as incrementally dovish. Trading had been muted ahead of the announcement, but sentiment improved as investors priced in a greater likelihood of continued easing despite mixed labour-market data and lingering macro uncertainty.

Asia

Asia-Pacific equities retreated after the Federal Reserve’s third rate cut of the year and a matching reduction by the Hong Kong Monetary Authority. The IMF urged China to accelerate structural reforms and pivot toward consumption-driven growth, warning that reliance on export-led expansion risks deepening global trade tensions. IMF leadership emphasised the need for increased social spending and reform of the long-standing Hukou residency system to unlock household mobility and support demand. Regional trading was subdued as investors weighed monetary-policy signals against structural challenges facing China and broader global economic uncertainty.

Commodities

Oil prices extended gains after the U.S. seized a sanctioned Venezuelan tanker, heightening geopolitical tensions and raising concerns over supply disruption. Market attention remained focused on evolving Ukraine peace negotiations, with recent attacks on vessels linked to Russian oil adding to risk premiums. Traders reported steep discounts for Venezuelan crude amid increased sanctioned supply from Russia and Iran and higher logistical risks. Gold eased after the Federal Reserve’s divided rate decision, while silver continued its record-setting run as investors assessed the uncertain trajectory of monetary policy and geopolitical developments.

Currencies

The rand firmed slightly following the release of stronger South African retail sales data, while global currency markets reacted to a less-hawkish-than-expected Federal Reserve. The dollar weakened as investors priced in the prospect of two additional rate cuts next year, with Chair Jerome Powell’s comments viewed as incrementally dovish. Sterling reached a one-and-a-half-month high, supported by improved risk sentiment, while the yen strengthened despite lingering interest-rate differentials ahead of a Bank of Japan meeting. Overall, markets recalibrated rate expectations across majors as policy divergence remained a central theme.

Hosken Consolidated Investments Limited (HCI) +0.17%

HCI announced the intra-group repurchase of 1.1 million shares at R136.10 each, with the shares reverting to authorised but unissued capital ahead of delisting. In addition, the Company completed a general repurchase of 4.86 million shares between September and December 2025, representing 5.65% of issued capital, at an average price of R133.11. Following both transactions, HCI now holds 7.9 million treasury shares, equivalent to 9.39% of shares in issue. The Board confirmed that the repurchases were funded from available cash and that the Group’s solvency, liquidity, capital position and working-capital resources remain fully adequate for ongoing operations.

Mr Price Group Limited (MRP) -13.67%

Mr Price Group has agreed to acquire 100% of NKD Group GmbH, a cash-based value apparel and homeware retailer operating across Central and Eastern Europe. The transaction covers both the sale shares and shareholder loan receivables, with the total purchase consideration capped at €487 million (approximately R9.66 billion). Management views the acquisition as strategically aligned with the Group’s value-focused growth ambitions and sees meaningful expansion potential within NKD’s established footprint. NKD’s experienced senior leadership team will remain in place and continue executing the existing strategy, supporting continuity through integration and positioning the business for continued operational and geographic growth.

Grindrod Limited (GND) -1.48%

Grindrod delivered resilient performance for the 11 months to 30 November 2025 despite weaker mining commodity prices, which fell 12% on average. Iron ore and chrome demand remained firm, supporting strong terminal activity, with the Port of Maputo exporting 13.9mt and TCM volumes reaching a record 9.1mt. Safety performance remained robust, and Group EBITDA margins improved in Ports and Terminals. Net cash of R0.2 billion reflects strengthened balance-sheet flexibility, even as gross debt increased due to sub-concession lease liabilities. Following a successful strategic streamlining phase, Grindrod is now focused on optimising core operations and advancing growth projects in rail and terminal capacity.

KAP Limited (KAP) +13.12%

KAP reported a stronger start to FY26, with EBITDA, operating profit and earnings improving as prior-year headwinds eased, including start-up costs from PG Bison’s MDF line, elevated finance charges and OEM-related disruptions at Feltex. PG Bison delivered higher panel production and sales, while Feltex benefited from recovering vehicle assembly volumes. Performance at Safripol remained weak amid global polymer oversupply, and Unitrans focused on exiting low-return activities. The balance sheet improved following the extension of a R2 billion revolving credit facility and disciplined capital expenditure. Management expects further gains from major investment projects, underperformance remediation and net-debt reduction. EPS and HEPS for 1H26 are both expected to rise by more than 20% year-on-year.

Oracle Corporation (ORCL) +0.67%

Oracle issued a weaker-than-expected outlook, guiding fiscal third-quarter revenue growth of 16%–18% and adjusted EPS of $1.64–$1.68, both below analyst forecasts. The company also signalled a sharp rise in fiscal 2026 capital expenditure, now expected to be $15 billion higher than previously indicated, as it accelerates investment in AI-driven cloud infrastructure. Q2 revenue of $16.06 billion and adjusted operating income of $6.7 billion missed consensus estimates, while remaining performance obligations rose to $523 billion, slightly short of expectations. Management highlighted new financing models—including customer-supplied chips and vendor capacity rentals—to support data-centre expansion. A one-off $2.7 billion gain from the sale of Oracle’s Ampere stake lifted reported profits.

Adobe Inc. (ADBE) -0.35%

Adobe delivered a stronger-than-expected fiscal 2026 outlook, projecting revenue of $25.90–$26.10 billion and adjusted EPS of $23.30–$23.50, reflecting sustained demand for its Creative Cloud ecosystem and accelerating monetisation of Firefly-based generative AI. Management reported robust uptake across Photoshop, Lightroom and Creative Cloud Pro, with freemium monthly active users rising 35% to more than 70 million. Adobe also announced a $1.9 billion acquisition of Semrush to enhance its AI-driven marketing analytics capabilities and deepen advertiser insights. Fourth-quarter revenue of $6.19 billion exceeded expectations, reinforcing confidence in the company’s ability to capture expanding AI-enabled creative and enterprise workflows.

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