ASX roars in 2025, led by tech and banking stocks

The local sharemarket has just signed off its best financial year since 2021. Here’s what investors think it will do over the next six months.

The Australian sharemarket rose 10 per cent over the past financial year, its best performance since 2021. Picture: Gaye Gerard/NewsWire

The Australian sharemarket has rallied to its best performance in four years, even as Donald Trump rolled out unpopular and hefty tariffs and tensions escalated in the Middle East.

It has jumped 10.2 per cent over the 2025 financial year, its best performance since 2021 when Covid-19 was wreaking havoc around the world.

Even with the sharemarket defying expectations in recent months, investors are broadly positive on the outlook ahead, tipping the S&P/ASX 200 will climb further by the end of the year, through bouts of volatility.

A rush into tech, financial stocks spurred much of the sharemarket’s gains over the past 12 months, while the energy sector was among the biggest drags in a challenging year for oil prices.

The Australian sharemarket has jumped 10 per cent in fiscal 2025. Picture: Joel Carrett/AAP Image

Ship builder Austal took top spot on the S&P/ASX 200’s best performers list, surging 152 per cent over the year.

“Austal has benefited from the lift more broadly in defence stocks and the increased spending on defence, as encouraged by America, particularly for countries like Australia, and more broadly, for NATO,” CommSec chief economist Ryan Felsman said.

Gold miner Regis Resources was the second-best performer over the year and one of three gold miners that made it into the top 10 as the gold price smashed past $US3500 in April when tariff tensions hit a peak.

Regis stock surged 150 per cent over fiscal 2025, followed closely by peer Genesis Minerals, up 145 per cent to take third place. Evolution Mining, in sixth place, climbed 123 per cent.

“Gold stocks can be a lot more volatile than the gold price because of the outlook, but in this environment, you’d expect the smaller to mid-cap gold miners to fare well because they don’t have long-dated contracts with lower, spot prices. They benefit directly from higher gold prices,” TenCap co-founder Jun Bei Liu told The Australian.

Others on the top 10 list include Sigma Healthcare, retailer Temple & Webster, Technology One and Zip Co. The BNPL operator’s shares climbed 110 per cent over the year but at $3.07 are still a long way from their peak of $12.35 reached in early 2021.

Among heavyweight financials, banking giant Commonwealth Bank was by far the best performer of the big four, surging close to 50 per cent over 12 months to fresh records above $190 apiece. The stock last traded at $184.75. Next best was Westpac, up 25 per cent.

For the duds of the year, IDP Education topped the worst performers list with a 76 per cent plunge in its share price. The company, which specialises in international student placement, took a walloping as Western governments set stricter limits on immigration.

“It’s an old-school market darling, but it’s just the operating environment; it’s been really tough conditions and it's not clear how long it will take before that reverses,” TenCap’s Ms Liu said.

Under-pressure mining company Mineral Resources was the second-worst performer of the year, its shares tumbling 60 per cent, while Pilbara Minerals was just behind with a 57 per cent decline.

Plumbing materials supplier Reece just escaped joining the worst performers list, coming in just outside the top 10 after a 42 per cent drop over the year as it navigates challenging construction markets in both the US and Australia.

Reece shares plunged 15 per cent on Friday alone as the toilets and taps supplier warned soft volumes and rising competition would hit its profit this year but added 1.6 per cent on Monday.

Sector-wise, energy stocks were the worst of the lot as slowing global growth and a drop in oil prices hit.

“We started the year with oil and $US83 a barrel, and we’re down now to about $US65. So we’re well down almost $20 a barrel despite all the noise around the oil price,” AMP chief investment officer Shane Oliver said.

AMP Head of Investment Strategy and Chief Economist Shane Oliver. Picture: John Appleyard/NewsWire

Despite rising geopolitical tensions and tariff threats still yet to play out, investors are broadly positive on the outlook for the months ahead and expect the Australian sharemarket to push higher again by the end of the calendar year.

Dr Oliver sees the market moving higher by the end of the year, tipping it could push from the current 8500 to potentially 8700 points.

CommSec’s Mr Felsman is also tipping low single digit gains in the coming six months, while TenCap’s Ms Liu is slightly more bullish.

“A lot of investors are still sitting on the sidelines, saying the market has rallied back too quickly. Many have been predicting a sharp fall in the share market, but I don’t share that view,” Ms Liu said.

“I think the market is very resilient. It’s sailed through many of those uncertainties. And in the next six months, we’ve got a rate cut coming in July, and then further cuts after that.”

Any time the RBA cuts rates and Australia is not in recession is very bullish for the share market, Ms Liu added.

Looking at the different sectors, companies that benefit from lower rates, such as property and housing market-related companies, should fare well, she said.

Mr Felsman and Dr Oliver both pointed to rate cuts as likely to spur the sharemarket higher.

“The general direction of interest rates will be down, and that includes in the US, almost certainly from September. And I think as we go through the year, Trump will start to move toward more positive policies, more of a focus on deregulation and policies that are more market friendly because he wants the Republicans to do well in the midterms (in November),” Dr Oliver said.

“I think in Australia we’ll see a pick-up in economic growth, which will probably mean we’ll go from seeing declines in profits over the last year or two to modest gains,” he said, adding that while July and the pre-Christmas period is typically positive for markets, August, September and October are known to be weak months.

Originally published as ASX roars in 2025, led by tech and banking stocks