Market update: 27 January 2026
Australian shares dipped 0.5% this week, led lower by the Real Estate and Financials sectors. Stronger-than-expected jobs data for December raised the likelihood of an RBA rate hike, while a firmer Australian dollar reflected expectations for tighter monetary policy ahead.
In the US, major indexes ended slightly lower, with the Nasdaq, S&P 500 and Dow all in the red. Equity sentiment improved after easing tariff tensions, as President Trump walked back earlier tariff threats linked to Greenland, helping stabilise risk appetite. Meanwhile, small-cap stocks outperformed as investors rotated out of large AI-focused companies. AI investment remains a strong theme, with Nvidia’s CEO calling for trillions in future infrastructure spending. However, housing data showed signs of stress, with pending home sales seeing their biggest drop since the pandemic.
European markets also declined, with political uncertainty and renewed delays to the EU’s Mercosur trade agreement. Business activity in the eurozone remained modestly expansionary, and the UK’s PMI rose to its highest level in nearly two years, despite a weaker labour market and rising inflation.
In Greater China, markets ended mixed. The Shanghai Composite rose 0.8%, while the Hang Seng slipped down 0.4%. China’s economy met its 5% growth target for 2025, with Q4 GDP at 4.5%, but weakness in domestic demand and falling investment continue to raise concerns about the sustainability of that growth.
Japanese shares edged slightly lower, as Prime Minister Takaichi announced plans for an early election and proposed removing the consumption tax on food if re-elected. The Bank of Japan held rates steady at 0.75%, while fiscal concerns added to the cautious mood among investors.
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