Looking at the Australian sector performance, it was a sea of red ink. All 11 broad sectors finished in negative territory. Technology led the carnage with a devastating -6% decline, extending the sector’s monthly losses. Materials fell -3%, while Financials shed -1.9%, which looked overdone. Whenever we get these two heavyweight sectors both falling on the same day, the benchmark is going to struggle.
The correction that originated last month with the ASX200 index hit (and overshot) the top of the 20-year-long established trend channel, and is now well advanced. Our view is that this correction is drawing closer to an end and will soon “run its course”, with key support below near 8,150/8,200 likely to put in a floor.
Our base case remains for upward momentum and the bull market to soon reassert in December following a correction (that has drawn down around 7% from the record highs).
Within materials, even gold didn’t offer a place to hide, with the All Ords gold index down -4.6% as gold lost recent upward momentum. On the defensive end, Consumer Staples held up best with a marginal -0.2% slip, while healthcare fell -0.5%, offering little consolation in a firmly downbeat session.
Technology plunged -6% to extend what has become a brutal month for the sector, now down around -20% over the past four weeks (with most of the damage in November). Technology One tumbled -17.2% after annual recurring revenue for 2025 missed forecasts, and the final dividend was given a trim. The shift to a SaaS+ business model is currently compressing margins, though it is expected to benefit shareholders over the medium term. WiseTech Global sank -4.6% to a two-year low while Xero fell -3.25%. The sector was littered with red ink, including NextDC -5%, Megaport -3.9% and Life360 -4.2%.
Next in the firing line was the materials sector. Diversified iron ore majors all retreated, with BHP down -3.7%, RIO off -2.65%, and FMG shedding -2%, even as the steelmaking raw material held relatively firm. Gold miners were weak as bullion drifted lower. Among large caps, Northern Star led the decline at -5.6%, Evolution Mining dropped -5.2%, while Newmont declined -2.7%. Small and mid-caps followed suit, including Rox Resources -7.9%, Falcon Metals -6.8% and St Barbara -6.7%, among others. The All Ords Gold Index tumbled -4.6%, reflecting the sector-wide retreat. Copper exposures fared no better. Sandfire fell -3.8% and Capstone Copper slipped -3.65%, while 29Metals slumped -8.05%. Some lithium stocks bucked the trend, including Pilbara Minerals and Liontown +2.1%.
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