September Quarter 2025: Global equity market rally continues

• The rally on global share markets continued over the September quarter, with the US and China particularly strong.

• Falling US bond yields added to the positive equity market momentum.

• The Australian share market lagged, with a pullback from highs reached in August highs.

  
  

  

International Equities

An easing in monetary policy by the United States Federal Reserve Bank appeared to lift investor sentiment across both bond and equity markets last quarter.

Further detail on the U.S. tariff program failed to concern investors, despite tariff rates being introduced for many countries above the 10% “baseline”.

The U.S. share market once again outperformed, with the S&P 500 Index gaining 8.1%. Information technology stocks outperformed, despite a brief lull in support during August. Nvidia’s 18.1% increase made a major contribution to the overall market gain, with the chip manufacturer now more than 50% ahead over the past year.

Tesla’s share price continued to take a volatile path, increasing by 40.0% over the 3-months to September, ahead of releasing impressive production numbers for the third quarter. There was a resurgence in support for smaller companies in the U.S., with the Russell 2000 Index gaining 12.4% for the quarter.

Outside of the U.S., share market performance was mixed. Across Europe, sentiment was softer, with the German market declining 0.1% and the French market gaining 3.1%. The U.K. market (up 7.8%) performed relatively well, despite a 4.2% drop in the crude oil price.

Asian markets also showed significant growth. Japan’s Nikkei Index gained 11.6% over the quarter, as the ongoing refocus on shareholder returns across corporate Japan has continued to attract buyers, whilst a weaker Yen also added support for Japanese exporters.

China’s equity market experienced a significant lift in support, with a 19.8% jump in the September quarter. China’s rally has defied the broader state of the local economy, which continues to appear subdued. Strong investor interest in the technology sector and artificial intelligence applications has been one contributor to the recent resurgence in Chinses equities.

Most of the other emerging economy share markets were positive over the quarter, although negative returns in India (down 4.3%) offset gains elsewhere. The Indian market was negatively impacted by the news that the United States would be doubling the tariff applied to many imports from India to 50%. The tariff increase was made in response to India’s ongoing purchases of Russian crude oil.

With the reduction in interest rates in the United States, solid support for real asset was maintained, with global listed property returning 4.3% and listed infrastructure rising by 3.8%. Australian listed property slightly outperformed the global average, with a 4.8% increase. This gain came despite a 4.3% decline in the data centre focussed Goodman Group, the sector’s largest constituent.

Australian Equities

The Australian share market underperformed the global average, with the S&P ASX 200 Index rising by 4.7%.

In an eventful earnings reporting season, healthcare major CSL Limited (down 16.3%) was sold down heavily, following a very negative reaction to the company’s annual results announcement.

Similarly, Woolworths (down 12.3%) disappointed with its profits results and dragged the consumer staples sector lower. Energy (down 1.5%) also finished in negative territory, with a slightly weaker oil price and the withdrawal of a takeover offer for Santos (down 9.9%), creating a difficult quarter for the sector.

In contrast, resource stocks (up 19.8%) were the best supported across the Australian market last quarter. Iron ore prices strengthened, appreciating 11.5% over the quarter. BHP (up 18.4%), rallied despite concerns stemming from a state‑ owned iron ore importer in China instructing their steel mills to temporarily halt purchases from BHP due to a pricing dispute.

The ongoing rally in the gold price was another source of support for Australian resource stocks. Gold’s price rise was also a notable contributor to a rally in smaller companies, with the Small Ordinaries Index rising 15.3% over the quarter.

The September quarter was also notable for a rotation away from the Commonwealth Bank, with the CBA’s 8.3% decline being matched by gains in both Westpac and National Australia Bank.

Fixed Interest & Currencies

Both the Australian and United States central banks reduced cash interest rates by 0.25% last quarter.

Cash rates are now 3.60% in Australia and between 4.0% and 4.25% in the U.S.

Confirmation of the lower U.S. cash interest rates also led to a decline in longer term yields, with U.S. 10-year Treasury Bond yields dropping from 4.24% to 4.16%.

This decline, however, was not matched in Australia, where stronger consumer spending and higher than expected monthly inflation results have reduced the probability of a further easing in interest rates this year. As a result, the Australian 10-year Government Bond yield increased from 4.16% to 4.31%.

With interest rates declining in the U.S., the downward momentum in the $US continued, enabling the $A to appreciate from US 65.6 cents to US 66.0 cents. The $A was also stronger against the Yen by 3.9% and also 0.7% higher relative to the Euro.

Important Information

The following indexes are used to report asset class performance: ASX S&P 200 Index, MSCI World Index ex Australia net AUD TR, MSCI World ex Australia NR Hdg AUD, FTSE EPRA/NAREIT Developed REITs Index Net TRI AUD Hedged, Bloomberg AusBond Composite 0 Yr Index, Barclays Global Aggregate ($A Hedged), Bloomberg AusBond Bank Bill Index, S&P ASX 300 A-REIT (Sector) TR Index AUD, S&P Global Infrastructure NR Index (AUD Hedged), MSCI China (Composite) in CN, Deutsche Borse DAX 30 Performance TR in EU. Hang Seng TR in HKD, MSCI United Kingdom TR in GBP, Nikkei 225 in JPY, S&P 500 TR in USD.

General Advice Disclaimer

This document has been prepared by Sage Advisers, trading as “Brad Matthews Investment Strategies” (BMIS). Sage Advisers is a Corporate Authorised Representative of Sage Advisers Pty Ltd (AFSL 238039). The document is intended for the use of financial adviser clients of BMIS and their staff only. Any advice provided is of a general nature and does not take into account personal circumstances. Any decision to invest in products mentioned in this document should only be made after reviewing the relevant Product Disclosure Statements. Past performance is not a reliable indicator of future performance.