SYDNEY (Dec. 21, 2025) — Australia’s sharemarket heads into Christmas week with the ASX 200 hovering around the 8,600 mark, after a late-week rebound in banks and technology steadied nerves — but didn’t deliver a convincing “Santa rally” story just yet. Friday’s lift came as offshore sentiment improved and investors rotated back into select growth names, while energy and health care continued to weigh on broader momentum. [1]
The week ahead is also unusual in one important way: it’s short and it’s thin. With the ASX closing for Christmas Day and Boxing Day and finishing early on Christmas Eve, liquidity will drop sharply, which can magnify moves triggered by headlines, offshore leads, and any surprises in local central-bank messaging. [2]
Below is what matters most for Australian stocks in the week commencing Monday, Dec. 22, 2025.
Where the market left off: a Friday bounce, but no clean year-end surge yet
Australia’s benchmark finished Friday higher after a week that ended slightly in the red overall, snapping a multi-week winning run. Depending on the data source, the ASX 200 ended the session in the low-to-mid 8,620s, up roughly half a percent on the day. [3]
What drove the Friday rebound:
- Tech and big banks helped lift the index, with several high-profile tech names posting solid gains. [4]
- Uranium stocks rebounded sharply, following a rough patch for parts of the sector earlier in the week. [5]
- Energy remained a problem area, with weak oil a drag and the sector singled out as the week’s worst performer by local market commentary. [6]
By sector, analysts pointed to energy and health care as key drags, while financials (and in some commentary, real estate) held up better. [7]
The Christmas trading setup: only three sessions, with an early close on Dec. 24
The biggest structural driver of the week is the calendar.
According to the ASX trading calendar:
- Wednesday, Dec. 24 (the last business day before Christmas Day) is a CLOSE EARLY session, with normal trading ceasing at 14:10 Sydney time. [8]
- Thursday, Dec. 25 (Christmas Day): CLOSED. [9]
- Friday, Dec. 26 (Boxing Day): CLOSED. [10]
That means the local market effectively has three trading windows (Mon–Tue plus a shortened Wed) to digest macro news and position into year-end. In practice, thin liquidity can cut both ways:
- modest headlines can trigger outsized index moves;
- single-stock volatility can rise on relatively small flows;
- and “risk-on/risk-off” signals from the US can transmit faster than usual.
The key domestic catalyst: RBA minutes on Tuesday (Dec. 23)
The standout local event is the Reserve Bank of Australia’s December meeting minutes, due Tuesday, Dec. 23 at 11:30am AEDT. [11]
Why it matters now:
- IG notes the RBA held the cash rate at 3.60% in December, but struck a hawkish tone, emphasizing broad-based inflation risks, a still-tight labour market, and the possibility that policy may need to respond if inflation doesn’t return to target. [12]
- Market pricing is also leaning into that risk: IG reports the Australian interest-rate market is pricing 9 basis points of hikes by February, 25bp by August, and 39bp cumulatively through end-2026. [13]
- Local market commentary has highlighted that the prospect of a “live” RBA meeting early in 2026 is hanging over sentiment — and that the minutes could influence how aggressively traders price a shift back toward tightening. [14]
What ASX investors will be listening for in the minutes
Expect focus on:
- how much debate there was around a hike (not just “scenarios”);
- the RBA’s read on services inflation and labour costs;
- whether housing and private demand are accelerating in a way that pressures capacity;
- and any language that hints at the threshold for action in early 2026. [15]
Who’s most sensitive on the ASX
- Banks and diversified financials can react quickly to shifts in the rates narrative. [16]
- Rate-sensitive defensives and property-linked names can also move on bond-yield swings, even in a low-volume week. [17]
- High-multiple growth stocks tend to be most exposed if yields rise (more on that below, because “AI valuation” worries are back in the frame). [18]
Offshore cues: US GDP (finally), durable goods, and consumer confidence
Even in a holiday-shortened Australian week, the ASX may take its strongest direction from US data landing Wednesday (AEDT). IG flags a tight cluster of releases in the early hours of Wednesday, Dec. 24 (AEDT):
- US durable goods orders (12:30am AEDT)
- US Q3 GDP second estimate (12:30am AEDT)
- US industrial production (1:15am AEDT)
- US Conference Board consumer confidence (2:00am AEDT) [19]
The GDP print is particularly notable this time. IG reports that, due to the US federal government shutdown, the usual “advance” estimate was cancelled, meaning next week’s release effectively functions as the first official reading for Q3. Consensus expectations cited by IG cluster around 2.0%–3.0% annualised, while the Atlanta Fed’s GDPNow model was tracking 3.5% as of Dec. 16 (per IG). [20]
For Australian equities, the transmission mechanism is straightforward:
- a stronger US growth pulse can lift cyclicals and risk sentiment — but can also push yields up, pressuring long-duration growth stocks;
- a softer read can do the opposite, potentially supporting rate-sensitive growth but raising concerns about demand, commodities, and global earnings momentum.
Japan back in the spotlight: BoJ rate move and minutes
Japan is once again a global macro swing factor — and Australian investors are watching because major shifts in Japanese rates can influence global bond yields, currency hedging flows, and broader risk appetite.
On Friday, the Bank of Japan raised its benchmark rate to 0.75%, described by ABC as the highest in 30 years. [21]
Next up: BoJ meeting minutes are due Wednesday, Dec. 24 at ~10:50am AEDT, according to IG. [22]
With the ASX trading in shortened sessions, any surprise tone in those minutes — hawkish or cautious — could spill into:
- global bond yields (and therefore equity valuation multiples);
- the yen (which can act as a “risk” barometer in global markets);
- and cross-market positioning into year-end.
The dominant theme: AI valuation worries vs. the “Santa rally” narrative
One of the loudest global narratives entering Christmas week is the tug-of-war between:
- hopes for a late-year rally, and
- renewed concern that parts of the AI trade have run ahead of fundamentals.
IG explicitly frames the week as “pivotal” with AI valuation concerns weighing on Wall Street and feeding into global positioning. It cites worries around soaring capex, heavy debt, construction delays, cash burn and mixed earnings. [23]
FNArena also points to a market “bifurcation” around AI, describing competing arguments: bears focused on overbuilding and balance-sheet strain, and bulls arguing the buildout remains robust (with upcoming 2026 earnings seen as a key test). [24]
For the ASX, this matters because:
- local tech leaders and growth names are priced off global risk appetite;
- and Australia’s data-centre, infrastructure and electrification plays sit in the gravitational field of the AI buildout debate (capex, power, funding, and timelines).
Sectors and stocks to watch on the ASX
Banks and financials: rates, regulation, and reputational headlines
The big banks helped underpin Friday’s rebound. [25]
But the sector also carries headline risk:
- ABC reported ANZ facing a $250 million penalty, though the stock held up on the day. [26]
- Elsewhere in financial services, Netwealth drew attention after agreeing to a large compensation package, which weighed on the share price. [27]
Next week’s RBA minutes are likely the primary macro swing factor for bank sentiment — particularly if they reinforce the idea that “cuts aren’t coming soon” and hikes remain on the table. [28]
Technology and high-multiple growth: offshore lead still rules
Friday showed that tech can still lift the index when the offshore lead cooperates — with multiple tech names posting solid gains. [29]
But the valuation debate means tech may also remain the most headline-sensitive pocket of the market:
- if US data pushes yields higher, duration-heavy growth can wobble quickly;
- if investors regain confidence in a “soft landing + easing” path, beaten-up growth can bounce.
Energy: oil weakness and corporate reshuffles
Energy was repeatedly flagged as the week’s laggard, with weak oil adding pressure. [30]
Corporate news also remains in focus: FNArena highlighted the resignation of a senior Woodside figure for a major global role, underscoring how leadership changes can collide with already fragile sector sentiment. [31]
Resources: uranium volatility, iron ore sensitivity, and gold’s bid
Friday’s tape was a reminder that “resources” are not a single trade:
- Uranium names staged a notable rebound. [32]
- Bulk miners were mixed, with iron ore still a key sensitivity. [33]
- Gold remained a live theme, with market snapshots showing the metal and gold-linked moves still on traders’ screens. [34]
Industrials and defence-linked names: contracts still matter in a thin week
In low-liquidity markets, company-specific news can dominate:
- Defence-linked and industrial names such as Austal and DroneShield were among those attracting attention on contract headlines and sharp moves. [35]
The week-ahead calendar Australian investors are watching (AEDT)
Here are the key scheduled events most likely to influence Australian equities in a shortened week:
- Mon, Dec. 22 — UK current account (6:00pm) [36]
- Tue, Dec. 23 — RBA meeting minutes (11:30am) [37]
- Wed, Dec. 24 — BoJ meeting minutes (~10:50am) [38]
- Wed, Dec. 24 — ASX early close: normal trading ceases at 14:10 Sydney time [39]
- Wed, Dec. 24 (overnight) — US durable goods, US Q3 GDP (second estimate / first official print), US industrial production, US consumer confidence [40]
- Thu–Fri, Dec. 25–26 — ASX closed (Christmas Day and Boxing Day) [41]
Bottom line: expect headline-driven moves — and watch rates first
In a normal week, investors can “wait for confirmation.” In a Christmas week with three sessions and an early close, price action can be dictated by thin liquidity and macro headlines, especially anything that shifts the outlook for interest rates.
For Australian stocks, the near-term hierarchy looks clear:
- RBA minutes set the domestic tone and can reprice the local yield curve. [42]
- US data can swing global sentiment and valuations — particularly for tech and growth. [43]
- Japan’s policy turn remains a sleeper risk for global rates and cross-asset flows. [44]
And with the Santa rally narrative still contested, Australia’s year-end direction may come down to whether rates volatility calms — or flares — in the final, shortened stretch of 2025 trading. [45]
References
1. www.abc.net.au, 2. www.asx.com.au, 3. www.abc.net.au, 4. www.news.com.au, 5. www.news.com.au, 6. fnarena.com, 7. fnarena.com, 8. www.asx.com.au, 9. www.asx.com.au, 10. www.asx.com.au, 11. www.ig.com, 12. www.ig.com, 13. www.ig.com, 14. fnarena.com, 15. www.ig.com, 16. fnarena.com, 17. www.ig.com, 18. www.ig.com, 19. www.ig.com, 20. www.ig.com, 21. www.abc.net.au, 22. www.ig.com, 23. www.ig.com, 24. fnarena.com, 25. smallcaps.com.au, 26. www.abc.net.au, 27. www.news.com.au, 28. www.ig.com, 29. www.news.com.au, 30. fnarena.com, 31. fnarena.com, 32. www.marketindex.com.au, 33. smallcaps.com.au, 34. www.abc.net.au, 35. smallcaps.com.au, 36. www.ig.com, 37. www.ig.com, 38. www.ig.com, 39. www.asx.com.au, 40. www.ig.com, 41. www.asx.com.au, 42. www.ig.com, 43. www.ig.com, 44. www.abc.net.au, 45. www.ig.com
