Markets Today: China Industrial Output at 15-Month Lows, Softbank Down 6%, Gold & Silver Hold High Ground

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The Nikkei dropped by more than 1% on Monday as its technology stocks fell, following a similar decline on Wall Street due to ongoing concerns that tech company valuations are too high (an "AI bubble").

The two largest companies dragging the index down were SoftBank Group and the chip-testing-tool maker Advantest (a key supplier to Nvidia). These two stocks alone accounted for the majority of Nikkei's total decline, with SoftBank falling 6% and Advantest tumbling 6.4%.

However, the broader index, the Topix, actually rose 0.2% because money was shifting out of technology and into other, less volatile sectors. Domestic-demand stocks were the main beneficiaries, with the rail sector being the top performer (up 2.1%), followed by services and retail.

Furthermore, the banking sector climbed 2% on strong anticipation that the Bank of Japan will raise interest rates this Friday.

These rate-hike expectations were strengthened by a central bank survey (the Tankan) released today, which showed business confidence among large manufacturers hit a four-year high.

China's factories and industrial businesses continued to grow in November 2025, with production increasing by 4.8% compared to the same month last year.

However, this growth was slightly slower than the 4.9% increase seen in October and missed the market expectation of 5.0%. This marks the weakest rate of expansion since August 2024.

The slowdown was due to softer growth in manufacturing and in the production of utilities (like electricity and heat).

In contrast, the mining sector saw accelerated growth, rising 6.3%. Looking closer at manufacturing, 30 out of 41 key industries expanded, with notable strength in the production of automotive vehicles (up 11.9%), computers and communications (up 9.2%), and railway/shipbuilding (up 11.9%).

Over the first eleven months of 2025, overall industrial production for China has increased by 6.0%.

European stocks started the week with a positive lift on Monday, with most sectors seeing gains as market participants moved back toward buying higher-risk assets after the market ended the previous week on a slightly down note.

The overall pan-European STOXX 600 index rose 0.4%, remaining close to an all-time high, with major markets in Spain and London also advancing. The small dip on Friday was due to the overall market following Wall Street's losses after the US chipmaker Broadcom raised new worries about a possible AI market bubble.

However, the market saw a broad recovery today, with strong gains in heavyweight sectors like banks and energy stocks, both up more than 1%. The only sector to decline was healthcare, dragged down by a nearly 5% drop in French drugmaker Sanofi. This drop happened because the US Food and Drug Administration (FDA) is expected to delay its decision on Sanofi's multiple sclerosis drug, tolebrutinib, which failed a main goal in a related trial.

Separately, in geopolitical news, Ukraine's President Volodymyr Zelenskiy offered over the weekend to drop the country's goal of joining the NATO military alliance after talks with the U.S. in Berlin, a move seen as a potential compromise for peace talks. This news caused shares in major defense companies like Rheinmetall and Renk to fall.

On the FX front, the Japanese yen strengthened on Monday, rising 0.5% to 155.08 per dollar, as investors looked ahead to an important week that will feature interest rate decisions from major central banks and crucial economic data from the US that will influence the Federal Reserve's policy decisions next year.

In contrast, the New Zealand dollar weakened, falling 0.36% to 0.5781, after the country's central bank head dismissed expectations for further rate hikes next year.

Elsewhere, the British pound eased slightly by 0.13% to 1.3364, and the euro dropped 0.06% to 1.1733.

The Australian dollar, which is often used as a stand-in for the Chinese yuan, also slipped 0.17% to 0.6643.

Despite this, the Chinese yuan itself actually strengthened, hitting a high of 7.0497 per dollar against the US currency. .

Currency Power Balance

Gold prices held steady near a seven-week high on Monday, driven by a combination of factors: the weakened US dollar and lower yields on US government bonds. These conditions make gold, which does not pay interest, more attractive to investors.

Gold's strength comes ahead of important US jobs data due this week, which investors will scrutinize for clues about future Federal Reserve policy. Spot gold rose 1% to 4,344.40/oz, having already reached its highest price since October 21st on Friday.

Meanwhile, silver also continued its ascent but remained slightly below the record high price it achieved last week.

In the energy markets, Oil prices remained stable on Monday. Investors were weighing two opposing forces: on one hand, there were worries about supply disruptions due to rising tensions between the US and Venezuela, which typically push prices up.

On the other hand, the market was concerned about a global oversupply of oil and the potential for a peace deal between Russia and Ukraine, which would likely push prices down.Ultimately, these factors balanced each other out, leading to very minor gains.

Brent crude futures rose by 15 cents (0.25%) to 61.27 a barrel, and US West Texas Intermediate crude also gained 15 cents (0.26%) to 57.59 a barrel.

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The European session will be quiet from a data perspective.

The US session will bring Canadian inflation data and comments from Federal Reserve policymakers.

New York Federal Reserve President John Williams is scheduled to speak at 4:30 PM Central European Time (CET) today. This could stoke volatility because Williams was a key figure in influencing market opinion to be more hopeful about an upcoming interest rate cut from the Federal Reserve before their meeting last week.

From a technical standpoint, the DAX Index has held above the key confluence level at 24000 for the last five trading days.

The DAX Index broke out of the bull flag pattern last week before immediately pulling back and closing back inside the upper band of the flag pattern.

A daily candle close above the flag pattern today could lead to a push higher while a move lower could lead to a retest of the 24000 confluence level.

The period-14 RSI is eyeing a retest of the neutral 50 level. A bounce off this level could give bulls some optimism as it does hint that bullish momentum remains intact for now.

Immediate resistance rests at the 24400 handle before the 24600 handle comes into focus.

Immediate support rests at 24000 before the swing high at 23880 and the 20-day MA at 23750 come into focus.

DAX Index Daily Chart, December 15, 2025

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