The domestic market finished June modestly higher, with the S&P/ASX 200 rising 0.54% to close at 8,778.7, an increase of 47 points over the month. Investor sentiment improved as geopolitical tensions in the Middle East eased, oil prices retreated from recent highs and the RBA left the cash rate unchanged at 4.35%. Gains were also supported by continued strength in global equity markets, particularly US technology stocks, although softer commodity prices limited the advance in Australian equities.
Sector performance was mixed. Financials provided solid support as investors rotated back into the major banks following May’s weakness, while Information Technology outperformed on renewed optimism towards growth stocks. Consumer Discretionary also finished higher as easing bond yields improved sentiment towards interest rate-sensitive sectors. In contrast, Materials underperformed as iron ore remained under pressure, Energy weakened following a sharp decline in oil prices and Real Estate softened as higher long-term bond yields continued to weigh on valuations.
The major banks delivered mixed performances during the month. National Australia Bank was the strongest performer, gaining 1.18%, while ANZ rose 0.43%. Commonwealth Bank eased 0.24%, remaining near record highs despite ongoing valuation concerns, while Westpac declined 2.19%. Elsewhere, technology stocks again attracted investor interest, with Wisetech Global and Life360 outperforming late in the month, while Neuren Pharmaceuticals surged 36.1% following positive European regulatory news. Underperformers included Judo Capital, which fell sharply after downgrading earnings expectations, while several gold producers weakened as bullion prices retreated.
The Australian dollar finished June at US68.69 cents. Gold closed at US$3,943.29/oz, while Brent crude oil settled at US$72.92 per barrel after easing geopolitical concerns reduced fears of supply disruptions. Iron ore finished the month near US$100 per tonne, continuing to constrain the major diversified miners. On the economic front, headline inflation eased to 4.0% in May from 4.2%, while trimmed mean inflation remained elevated at 3.6%. Employment conditions remained resilient and household spending continued to improve, reinforcing expectations that the RBA is likely to remain on hold while monitoring further progress on inflation ahead of the August reporting season.
