Australia’s share market finished Christmas Eve trading in the red after a shortened session, with the S&P/ASX 200 closing down 0.4% (33 points) at 8,763. The early finish capped a volatile pre-holiday week that still ended positive, with the benchmark up about 1.6% for the week even as investors rotated between richly priced bank stocks and resources names buoyed by surging metals prices. [1]
With ASX Trade closing early at 14:10 Sydney time on 24 December and the market set for a multi-day holiday pause before reopening, traders largely focused on positioning into year-end themes: whether Australian interest rates might rise in 2026, how far the Australian dollar can run, and whether the extraordinary rally in gold, silver and copper has further to go. [2]
ASX 200 closes lower in early Christmas Eve trade
The ASX’s Christmas Eve session followed a familiar holiday pattern: lighter liquidity, sharper single-stock moves, and investors reluctant to take big bets with the market about to shut for several days. In early dealings, the ASX 200 was down around 0.3%, and losses deepened to roughly 0.6% by midday, before recovering slightly into the close. [3]
By the end of the session, market weakness was broad. ABC’s live market coverage reported that all sectors finished lower except “the mining sector” (+0.1%), with education (-2.8%), healthcare (-1.5%) and industrials (-0.6%) leading declines. [4]
That sector shape tells the day’s story: defensives and growth pockets softened, while miners found support from metals prices hitting fresh highs.
Why the ASX fell: big banks pull back as “stretched valuations” bite
Financials—Australia’s biggest heavyweight sector—were a key drag. According to ABC, financials fell 0.4%, with all four major banks down between 0.2% and 1%. [5]
The tone around banks remains increasingly valuation-focused. ABC noted the majors are facing “stretched valuations”, describing them as among the most expensive compared with banks in other developed markets (in terms of share price relative to profits). [6]
That matters because, into 2026, the banks sit at the intersection of two forces that can pull in opposite directions:
- Higher-for-longer rates can support net interest margins (a potential positive),
- but rate hikes also raise credit risk and can pressure housing/consumer demand (a potential negative),
- and, at high valuations, even “good news” has less room to surprise.
Copper breaks above US$12,000 a tonne and miners buck the trend
Resources were the standout pocket of resilience—especially copper-exposed names—after another surge in industrial metals.
ABC reported copper surged above US$12,000 per tonne, a fresh record, and said the move helped lift major miners. Rio Tinto shares climbed as high as $148 (a record), extending a multi-day run, while Capstone Copper and IGO jumped around 2% each. [7]
A key driver in today’s analysis: demand linked to electrification and AI infrastructure. ABC quoted BetaShares investment strategist Tom Wickenden saying copper is commanding attention due to AI data centre demand and its essential role in electrification build-outs. [8]
At the same time, precious metals stayed near all-time highs. Reuters’ global markets wrap described spot gold hitting fresh records around US$4,524/oz and silver reaching about US$72.27/oz, extending a blistering 2025 run. [9]
ABC’s local snapshot similarly showed gold near US$4,495/oz during the session. [10]
Australian dollar at 14‑month high: what it signals for rates and stocks
Currency was a major part of today’s market narrative.
ABC reported the Australian dollar traded around 67 US cents, its strongest level since October 2024—helped by rising commodities and by markets increasingly pricing the risk that Australian rates may not stay on hold in 2026. [11]
Reuters separately noted the Aussie dollar was up about 8.4% year-to-date as investors weighed diverging rate paths globally and a softer US dollar backdrop. [12]
For Australian equities, a stronger AUD is a double-edged sword:
- Helps companies that import goods (some retailers and industrials), and can cool imported inflation.
- Hurts exporters and businesses earning in US dollars (translation headwinds), unless they’re well-hedged.
- Signals tighter financial conditions overall—often a headwind for the most rate-sensitive equity segments if investors believe rate hikes are back on the table.
ABC also pointed to a broader US-dollar weakness narrative, noting investors have been rotating away from US assets amid tariff uncertainty and concerns about policy independence—factors that can indirectly affect Australian markets through global risk sentiment and currency moves. [13]
Today’s notable ASX movers: Monash IVF plunges; DroneShield and Lendlease draw bids
Even with the index relatively subdued, single stocks moved sharply.
ABC reported Monash IVF fell 13.4% after a consortium led by Genesis Capital Investment Management and Soul Patts withdrew its takeover bid. [14]
In media, Seven West Media rose 4.2% after its merger with Southern Cross Media was approved by the Supreme Court of NSW, with Seven’s shares set to be suspended and later de-listed. [15]
Across the broader “leaderboard” of the day, ABC highlighted strong buying interest in DroneShield, Treasury Wine Estates, Lendlease, and several miners and lithium-linked names including IGO, Perseus Mining, Capstone Copper, Liontown and Pilbara Minerals (PLS)—supported by record gold and copper prices. [16]
On the downside, ABC said Austal, Seek, Pro Medicus, Xero and Zip Co were among the biggest fallers. [17]
Separately, one of the most-followed market liveblogs (The Australian) described the day as a subdued Christmas Eve session and put the ASX 200 close at 8,762.70 at 2:10pm AEDT, also noting the week finished up close to 1.6% and the market would resume on Monday, 29 December. [18]
Global backdrop: Wall Street records, soft US dollar and booming metals
Australia’s market action today happened against a supportive—but complex—global tape.
Reuters reported global equities were heading into year-end with strong momentum, with the S&P 500 posting a record close and investors continuing to ride AI-linked growth themes. [19]
At the same time, the US dollar remained under pressure: Reuters said the dollar was on track for its worst annual performance since 2003, down roughly 9.9% for 2025, as investors expected further Fed cuts in 2026 while some peers looked closer to hikes. [20]
For Australia, that mix—record US equities, a weaker USD, and extremely strong metals—tends to support resources and risk appetite, but can also amplify the AUD’s rise and tighten conditions for earnings-heavy global exporters.
Market outlook and forecasts: RBA rate risk returns for 2026
The big forward-looking question hanging over today’s ASX trade is simple: will Australia’s next rate move be up?
Reuters reported that RBA board minutes showed policymakers discussed scenarios where a cash rate increase might be needed in 2026 if inflation proves more persistent, even as the bank held the cash rate at 3.60%. [21]
Those minutes highlighted that December-quarter inflation data is pivotal (the next major print is due in late January), and Reuters said market pricing had swung toward a roughly 25% chance of a February move, with expectations implying a quarter-point rise fully priced by July and additional tightening risk into 2026. [22]
ABC’s market blog echoed the same focal points: the RBA’s first meeting of 2026 is scheduled for 3 February, and the December-quarter CPI release is set for 28 January, both likely to be major catalysts for rate-sensitive sectors like banks, property, and high‑multiple growth stocks. [23]
Zooming out, Reuters also noted that while 2025 delivered one of the most aggressive global easing waves since the financial crisis, analysts are increasingly talking about a shift in tone into 2026, specifically flagging Australia (and Canada) as places where hikes could come back into the discussion. [24]
Commodities forecast watch: gold’s 2025 surge feeds bullish 2026 targets
One of the loudest “forecast” stories in today’s news cycle is the outlook for precious metals after an extraordinary year. The Australian’s reporting cited forecasts from major market participants suggesting gold could push toward US$4,900–US$5,000/oz by 2026, while also cautioning that easing geopolitical risks or shifting macro conditions could cool the rally. [25]
For ASX investors, that matters because Australia’s gold sector is a large, liquid source of beta to bullion, and the market has increasingly treated miners as both an inflation hedge and a “risk-off” shock absorber—particularly when rates and currencies are moving fast.
What to watch when the ASX reopens on 29 December
With the market now heading into the holiday break, the next decisive drivers are likely to be macro, not micro:
- AUD direction near 67 US cents: whether the currency consolidates or breaks higher could shape sentiment across exporters and retailers. [26]
- Metals prices: copper’s move above US$12,000/t is now a high-stakes signal for miners and the broader “electrification/AI infrastructure” narrative. [27]
- Rates expectations: markets will keep repricing the probability of an RBA hike as investors approach the 28 January CPI and 3 February RBA decision points. [28]
- Global risk tone: Wall Street’s record levels and the US dollar’s weakness have been supportive—any reversal could spill into ASX futures quickly. [29]
- Tech and geopolitics: even news that seems US-centric—like the delayed timeline for potential semiconductor tariffs—can influence global growth sentiment and tech multiples, including ASX tech names. [30]
Australia’s stock market may have ended Christmas Eve quietly at the index level, but the undercurrent is anything but calm: a strengthening currency, surging metals, and a central bank increasingly sensitive to upside inflation risk are setting up 2026 as a year where the next big trend may be driven by rates again—just as investors thought the cutting cycle had done its work. [31]
References
1. www.abc.net.au, 2. www.asx.com.au, 3. www.abc.net.au, 4. www.abc.net.au, 5. www.abc.net.au, 6. www.abc.net.au, 7. www.abc.net.au, 8. www.abc.net.au, 9. www.reuters.com, 10. www.abc.net.au, 11. www.abc.net.au, 12. www.reuters.com, 13. www.abc.net.au, 14. www.abc.net.au, 15. www.abc.net.au, 16. www.abc.net.au, 17. www.abc.net.au, 18. www.theaustralian.com.au, 19. www.reuters.com, 20. www.reuters.com, 21. www.reuters.com, 22. www.reuters.com, 23. www.abc.net.au, 24. www.reuters.com, 25. www.theaustralian.com.au, 26. www.abc.net.au, 27. www.abc.net.au, 28. www.abc.net.au, 29. www.reuters.com, 30. www.abc.net.au, 31. www.abc.net.au
