The ASX 200 has risen approximately 1% during June, taking gains for the 2025/26 financial year to around 2.5%. Including dividends, the S&P/ASX 200 Accumulation Index has returned approximately 6%, highlighting the importance of income in Australian equity returns.
Australia has lagged many developed markets over the past year for two primary reasons. Firstly, the Reserve Bank of Australia maintained comparatively tighter monetary policy than many other central banks, supporting the Australian dollar and making equities comparatively less appealing than cash.
Secondly, Australia’s market composition differs significantly from overseas indices. The ASX has relatively limited exposure to the large-cap technology companies that have been the primary drivers of global equity performance. Instead, the Australian market remains heavily weighted towards financials and resources, sectors that have generally produced more moderate returns.
S&P ASX 200 (+6%)
US S&P 500 (+20%)
Both the Dow Jones Industrial Average and the STOXX Europe 600 reached fresh record highs during the month, reflecting continued optimism surrounding global economic growth and artificial intelligence-led investment.
SpaceX completed largest IPO ever undertaken, raising US$85 billion, representing 5% of the company. Investor demand was exceptionally strong, although trading has since been characterised by heightened volatility as the market digests the company’s substantial valuation. The next few months will be interesting as much more of SpaceX’s free float unlocks. This enables early investors, who have held shares in SpaceX since well before it came public, to begin to realise some of those holdings.
Oil declined approximately 23% during the month, retracing to levels close to those seen before the escalation of conflict in the Middle East.
The combination of lower oil prices, resilient economic activity and continued strength in technology shares has been supportive of global equity markets.
Alex Leyland