Rocky year in shares as miners dig market out of a hole
The Australian stock market lagged well behind its global peers last year, with two sectors suffering heavy losses.
Overall, the local stock market closed positive in the 12 months to June 30 but sharply underperformed overseas markets as miners again led investors.
However, the technology and healthcare sectors lost almost 40 percent.
The benchmark S&P/ASX200 index finished 2025/26 with a rise of less than 2.8 percent; This was its worst performance in a financial year since the 10.2 per cent loss in 2021/22.
“It’s pretty soft,” said AMP chief economist Shane Oliver, noting how well overseas markets have performed.
For example, the US S&P500 index rose 20.9 percent in 2025/26, while Japan’s Nikkei 225 index rose a striking 73 percent.
The MSCI World Index, the global benchmark for developed countries, returned 19 percent.
“It’s well and truly underdeveloped,” Dr Oliver said.
The Australian stock market was doing fairly well until late February, when the US attacked Iran and ignited the Middle East conflict, a war that has yet to be finally resolved.
At the same time, the Reserve Bank of Australia increased interest rates in February, March and May, while other major central banks also put interest rates on hold.
“The RBA’s more aggressive approach has not helped,” Dr Oliver said.
“So the tax changes in the (federal) budget will probably put some cloud over the market in the second half of the fiscal year.”
However, if company dividends are included, the S&P/ASX200 achieved a stronger return of 6.1 per cent, outpacing most bank deposits.
Asset manager Schroders Australia said overall the year was not as bad as it could have been given the war.
“You’ll see a lot of investors making pretty good profits in the financial year,” investment leader Sebastian Mullins told AAP.
The big winners of the 2025/26 season have been miners, including rare earth producer Elevra Lithium. Elevra Lithium closed the year at $9.60 with a market cap of almost $2 billion, a whopping 327 percent increase.
The materials sector, comprised mostly of mining companies, grew by 48 percent and was by far the best-performing sector in the market.
“If you’ve got enough resources stocked, you’ve had a pretty good year,” Schroders said. Australian head of equities Martin Conlon said:
This includes technology-based stocks such as WiseTech Global, which is a laggard on the S&P/ASX200 index.
It completed the 2025/26 year with a 70 percent decrease at $ 33 per share and closed the year with a market value of $ 11 billion.
WiseTech was followed by Kiwi cloud accounting platform Xero, which is down 60 per cent in the year.
Overall, the healthcare and technology sectors of the market both lost 37 percent.
Australia-based hearing implant company Cochlear lost 60 percent, while blood products giant CSL lost nearly 51.8 percent to round out the S&P/ASX200’s top five worst losers.
Other top gainers included another lithium miner PLS Group (up 270%), gold miner Minerals 260 (up 534%) and defense manufacturing company Electro Optic Systems (up 256%).
The consumer staples sector, which includes companies such as Coles and Woolworths, also had a good year, with gains of 10 per cent.
However, the biggest rise of the year in the S&P/ASX200 index was the biotechnology company 4DMedical, which gave investors a spectacular return of 1,787 percent.
Shares of the maker of lung function products rose from 24 cents to more than $6 in May and fell to around $4.50 by the end of the year.
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