Quarter in Review: June 2025

24 July 2025

As is customary in the June quarterly we take an annual review but incorporate commentary on the quarter. Financial Year (FY) 2025 saw markets whiplash between exuberance and despair – marked by Trump becoming President, crowding into banks, record gold price and another year of multiple expansion. The whiplash is illustrated by the quarterly performance of the ASX300 Accumulation Index – the September quarter delivered up 7.8%, the December quarter down 0.8%, the March quarter down 2.9% and finished the June quarter violently up 9.5%. Overall, the index finished the year up 13.7%.

  1. Global markets: The ASX300 Accumulation Index’s performance lagged US indices over the quarter mainly relating to the US market’s heavy exposure to momentum growth stocks which outperformed as a style. The S&P500 Index was up 10.9% while the NASDAQ was up 18.0%. Zooming out to FY25, this was the year where “out of favour” markets caught a bid, with the Hang Seng Index up 36.3% and the German Dax +30.6%.
  2. Sector performance: All sectors were up with the exception of Materials over the quarter. The best performing sectors were IT (+26.9%), Financials (+16.1%) and Communication Services (+14.1%). The worst performing sectors were Materials (-0.4%), Utilities (+2.0%) and Healthcare (+2.4%). The strong quarter basically explained all of IT’s FY25 performance (was up 27.6%) making back a weak March-quarter and explained
    roughly half of Financials FY25 performance (was up 31.0%). The energy sector struggled for the best part of the year but saw a relief rally in June following the Israel/Iran war, up 8.9%. This was aided by the takeover bid for Santos.
  3. CBA’s Rise: Stock leadership was highly concentrated in the ASX20. While the hot topic of the year featured the continual rise of the major banks, and notably CBA who’s share price delivered 45%, other large cap stocks severely underperformed with the likes of BHP down 15%, CSL down 18% and WDS down 17%. CBA surpassed BHP as the largest stock in the Australian market, with an addition of 2.8% to the weight during
    the year closing on 12% of the ASX300 benchmark.
  4. Rates and Yields: The quarter saw a decline in yields across the AUS 10-Yr, down 0.22% to 4.16%. Comparatively the US 10-Yr move was modest, up 0.02% to 4.23%. This divergence is largely attributed to markets pricing in potential inflationary impacts in the US economy from Trump tariffs in the near term, and possibly higher for longer prices if manufacturing reshores from low-cost production countries notably China. Meanwhile, ex-US countries are possibly poised to benefit from a glut in Chinese manufacturing capacity finding a new home selling goods at competitive prices. We have observed such a dynamic in industrial sectors such as chemicals and materials.
  5. Commodities: Commodity trends were sluggish in the June quarter, with Iron Ore prices down 4.9% and Brent Oil prices down 9.5%. These moves were largely front-ended in April as a reaction to tariff related recession fears. The oil price was also hurt by an unexpected release of surplus capacity by OPEC+. The bright spot in commodities remained Gold up 5.8% over the quarter, spurred on by geopolitical fears and central bank buying.
  6. Corporate news: The quarter saw deal-frenzy across the tech sector. WiseTech announced the acquisition of Texan software firm e2open for US$2.6bn (A$4bn), which marks the company’s biggest acquisition to date, to be funded by a US$3bn debt. Xero paid US$3.9bn acquisition of Melio in a strategic advance into the US payments market. Meanwhile the IPO space looks to be opening up with Virgin, Gemlife and Greatland Gold listing in close succession. Energy producer Santos received an indicative bid from XRG, a consortium led by UAE owned oil and gas major ADNOC for an effective price of $8.89, a ~30% premium to the stock’s recent price.