ASX 200 slips on 16 December 2025 as banks and miners fade; DroneShield jumps on $49.6m European deal and RBA rate-hike bets return

SYDNEY, 16 December 2025 — Australia’s share market ended lower on Tuesday as an early bounce fizzled into the afternoon, with investors turning more cautious on the heavyweight banks and miners while tech and energy again dragged on sentiment. The S&P/ASX 200 finished at 8,581, down 0.63%, after trading as high as 8,672.2 earlier in the session. ^[1]

The broader All Ordinaries also closed in the red, ending at 8,872.1 (down 0.58%), reflecting broad-based softness outside the top end of the market. ^[2]

Under the surface, today’s tape had a familiar 2025 feel: rate expectations are re-awakening, global risk appetite is wobbling ahead of key US data, and the ASX’s sector leadership remains jumpy—especially in technology and energy. ^[3]

Australia stock market today: the numbers that mattered

The S&P/ASX 200’s down day was defined by a reversal: upbeat at the open, softer into the close.

S&P/ASX 200:8,581, -0.63% (day range: 8,580.5–8,672.2) ^[4]
All Ordinaries:8,872.1, -0.58% (day range: 8,872.1–8,954.9) ^[5]

Live reporting through the afternoon captured the mood shift: after opening higher, the market “wilted” as selling returned to the banks and miners heading toward the close. ^[6]

Why the ASX fell: three big drivers behind today’s move

1) Rate-hike talk is back, and the market hates surprises

The clearest “today” catalyst wasn’t a single earnings print—it was the re-pricing of Reserve Bank of Australia (RBA) risk.

On Tuesday, both Commonwealth Bank of Australia (CBA) and National Australia Bank (NAB) shifted to forecasting a February 2026 rate hike, a meaningful pivot given both had previously expected the RBA to stay on hold through 2026. NAB’s chief economist Sally Auld argued the balance of risks to growth and inflation has shifted enough to warrant what she described as a “modest recalibration,” potentially around 50 basis points of hikes over the next six months. ^[7]

CBA pointed to sticky inflation dynamics, noting the RBA’s preferred “trimmed mean” measure ran 3.0% year-on-year to the September quarter—above the central bank’s earlier forecast—and flagged a stronger-than-expected October CPI print. CBA’s base case now looks to the 3 February 2026 meeting (after Q4 2025 CPI on 28 January) as the most likely point for lift-off. ^[8]

Why this matters for stocks: higher-for-longer (or higher-again) rates typically compress valuation multiples—especially for long-duration growth names—while also raising the hurdle rate for riskier corners of the market.

2) Global caution ahead of US jobs data kept risk appetite tight

Australia didn’t trade in a vacuum today. Global markets were cautious ahead of key US labour-market data—made messier by disruption around the timing of releases—and that fed into softer risk-taking across Asia. ^[9]

ABC’s market snapshot around early afternoon showed regional weakness (Japan, Hong Kong, and mainland China all lower), while US futures signalled more pressure for tech-heavy markets. ^[10]

3) Sector leadership stayed defensive: energy and tech did the damage

By late afternoon, the market’s “red zones” were clear: energy and tech.

Market Index data showed:

Energy down about 2.2%
Information Technology down about 2.2%
Materials down about 0.7% ^[11]

ABC reporting also highlighted tech weakness, naming Technology One, Xero and SiteMinder as down more than 2% at one point, as local tech followed US peers lower. ^[12]

Energy’s sell-off tracked softer oil pricing in the day’s cross-asset backdrop, with Brent crude quoted around US$60.26/barrel in the afternoon snapshot. ^[13]

Winners and losers: DroneShield rockets while tech stays under pressure

DroneShield surges on a $49.6 million European military contract

One stock loudly ignored the broader market’s gloom: DroneShield.

The company said it had received a $49.6 million contract from an “in-region European reseller” to supply a European military end-customer with handheld counter-drone systems, accessories and software updates, with deliveries and cash receipts expected to be completed in Q1 2026. DroneShield also noted that a significant portion of the hardware is already on the shelf, reducing execution risk compared with a build-to-order contract. ^[14]

In live market coverage, DroneShield was flagged as the ASX 200’s top mover during the session after the contract news. ^[15]

Tech weakness continues: the valuation math is getting harsher

While individual decliners varied through the day, the bigger point was the continued pressure on the tech cohort—an area that’s especially sensitive to renewed rate-hike expectations. ^[16]

Corporate and sector news moving Australian shares today

Star Entertainment: CEO exit and a chair-led interim structure

In the consumer/casino space, Star Entertainment announced CEO Steve McCann would step down. Chair Bruce Mathieson Jr. will take on additional executive duties during the search for a permanent CEO. Star shares rallied as much as 4.8% to 11 cents in response. ^[17]

The market tends to treat leadership changes at distressed or turnaround stories as a “choose your own adventure” moment: it can be stabilising (clear accountability, reset strategy) or destabilising (execution risk, governance questions). Today, the initial reaction leaned optimistic.

Orica: chair transition confirmed at AGM; dividend and performance notes

Among the day’s notable ASX company communications, Orica released AGM addresses confirming chair succession.

In the chairman’s address dated 16 December 2025, outgoing chair Malcolm Broomhead said he would step down at the conclusion of the meeting, welcoming Vik Bansal as an independent non-executive director and chair-elect—subject to shareholder election—who would be appointed chair at the conclusion of the meeting. ^[18]

The same AGM materials also referenced business performance highlights, including Orica’s highest EBIT in 13 years (reported as $992 million, up 23%) and a final ordinary dividend of 32 cents per share (unfranked). ^[19]

Rio Tinto vs Rusal: legal risk back in focus

In the resources complex, a Russian court ruling in favour of aluminium producer Rusal in a lawsuit against Rio Tinto added legal and geopolitical noise, tied to disputes over a Queensland alumina refinery and the wider sanctions backdrop. Rio rejected the proceedings and indicated it would defend its position and protect its rights and assets. ^[20]

For ASX investors, the key isn’t just the headline number attached to a court ruling—it’s whether enforcement risk (or operational disruption risk) becomes remotely plausible. Even low-probability tails can weigh on sentiment when markets are already skittish.

Fortescue’s copper push remains a live theme

Copper remained a strategic storyline in big-cap mining, with Fortescue recently moving to acquire the remainder of Alta Copper, valuing the Toronto-listed miner at about C$139 million (US$101 million) via a C$1.40/share cash offer. ^[21]

Even though the deal headlines broke earlier, the market continues to trade the broader thesis: miners want longer-life, electrification-linked exposure—and copper is the crown jewel of that narrative.

ASX Ltd: regulator-driven capital charge still reverberating

Market infrastructure also stayed in focus after ASIC imposed an additional A$150 million capital charge on the ASX, prompting the exchange operator to cut its dividend payout ratio (and revise financial targets). ^[22]

This is one of those stories that’s not about “today’s index points” so much as how investors price confidence in the plumbing of the market itself—settlement resilience, governance, and long-run investment discipline.

Cross-asset snapshot: Aussie dollar down, gold high, oil softer

By early afternoon AEDT, the broader macro tape looked like this:

Australian dollar: about US 66.21 cents (down roughly 0.3%) ^[23]
Spot gold: around US$4,309/oz ^[24]
Brent crude: around US$60.26/barrel ^[25]
Iron ore (Monday reference): about US$102.10/tonne ^[26]

Gold staying elevated while equities soften is the classic “nervous system check” for markets: it often signals a tilt toward hedging and capital preservation.

Outlook: what investors are watching next after today’s ASX slip

The near-term ASX story is now a rates story again

The biggest “forecast” development today was the shift by major banks to a February 2026 hike call. That pulls investor attention forward to two concrete waypoints:

Q4 2025 CPI (28 January 2026)
RBA meeting (3 February 2026) ^[27]

Until then, every inflation or labour-market datapoint—and every signal on pricing power, wages, and services inflation—feeds into a market that’s newly sensitive to the possibility that the RBA may not be done tightening.

Globally: US data and risk appetite remain the gatekeepers

Australia’s equity market still takes its emotional cues from global risk appetite, especially when the ASX is sitting near technically meaningful levels and sector leadership is fragile. Reuters reporting emphasised global caution heading into US labour data, with broader markets leaning risk-off.

If US growth data weakens materially, the ASX can sometimes find relief via lower global yields and a softer USD—helpful for valuation-sensitive sectors. But if inflation proves sticky and yields rise, that usually tightens the screws on tech, property-linked names, and leveraged balance sheets.

A practical map for “ASX today” into year-end

Into the back half of December, investors are typically balancing three forces:

Positioning and liquidity (markets can exaggerate moves when trading thins)
Macro catalysts (CPI, jobs, central bank signalling)
Company-specific updates (contracts like DroneShield’s, board/CEO changes like Star, AGM messaging like Orica) ^[28]

Today’s session was a neat summary of that tug-of-war: macro caution pulled the index down, but stock-specific news still created sharp pockets of opportunity.

Bottom line

The Australian stock market today was less about one dramatic shock and more about a mood change: early optimism gave way to late caution as investors re-priced the possibility of RBA tightening in early 2026, tracked global nerves ahead of US data, and continued rotating away from rate-sensitive sectors.

Even on a down day, the ASX delivered its trademark contrast: while the index slipped, DroneShield’s contract update showed how quickly a single credible announcement can overpower the macro haze—at least for one stock, for one session. ^[29]