The Australian stock market is treading carefully on Tuesday, 9 December 2025, with the S&P/ASX 200 index drifting lower as investors wait for the Reserve Bank of Australia’s (RBA) final interest rate decision of the year and a crucial US Federal Reserve meeting later in the week.
By late morning, the ASX 200 was trading around the 8,590–8,600 level, down roughly 0.3–0.4% on the day, after briefly being off only about 0.1% earlier in the session. [1] The move extends Monday’s modest 0.1% decline to 8,624.4 points, as markets position for the RBA and a busy central‑bank week globally. [2]
All market levels and moves in this article refer to midday AEDT on 9 December 2025 and may change by the close.
Market snapshot: ASX 200 edges lower, breadth weak
Intraday trading has been sluggish rather than panicky:
- Around 10:15 am AEDT, the ASX 200 was down about 0.3% at 8,601 points. [3]
- By 10:55 am, the index was off 0.13%, marking a sixth straight session of narrow, “sideways” trade, with two-thirds of ASX 200 stocks (131 names) in the red, led by weakness in energy, gold and tech names. [4]
- At 11:30 am, live coverage from The Australian put the benchmark down about 0.4% at 8,589, as traders squared positions before the RBA decision. [5]
The tone is cautious rather than catastrophic: investors are clearly reluctant to take big directional bets while both the RBA and US Federal Reserve are about to speak.
Global leads aren’t helping. US equities slipped overnight, with all three major indices lower as Treasury yields and the US dollar ticked up and traders waited on the Fed’s final 2025 meeting and an almost fully priced‑in rate cut. [6] Asian markets are also slightly weaker today as Fed‑related nerves ripple across the region. [7]
RBA in focus: “hawkish hold” expected at 3.6%
The cash rate target sits at 3.60%, where it has been since the RBA’s November meeting. [8] The central bank has flagged its next move at 2:30 pm AEDT on 9 December, and that timing is effectively anchoring today’s trade.
A Reuters poll of 38 economists conducted in early December found unanimous expectations that the RBA will leave rates on hold at 3.6% at this meeting. [9] The more interesting action is in the path of rates:
- Many forecasters now expect no move at all through 2026,
- Others see at least one rate cut,
- And futures markets are pricing better‑than‑even odds that the next move is actually a hike by late 2026, as inflation has proven sticky. [10]
Monday’s Reuters close report on the ASX captured the mood succinctly: a rate hold is “baked in”, but investors are wary that the Bank could lean more openly toward future tightening after a run of resilient domestic demand and steady job growth. [11]
The RBA’s own dashboard still shows inflation running above target. The Bank highlights annual CPI near the upper end of (or slightly above) its 2–3% band, and market commentary increasingly frames today’s meeting as the point where Governor Michele Bullock either keeps the door ajar for hikes or softens the rhetoric. [12]
Locally, jobs data due Thursday will add another piece to the puzzle for rate expectations. [13]
Sector moves: resources wobble, lithium shines, defensives steady
The sector picture is a mix of risk‑off caution and idiosyncratic stories.
Gold and resources under pressure
Monday’s trade – formally wrapped up this morning in Inside Adviser’s daily note – saw the ASX 200 slip 0.1% as gold miners lagged. Newmont, Northern Star and West African Resources all lost ground following a pullback in the gold price. [14]
Today, the MarketIndex live feed shows:
- Energy and gold stocks again among the weaker sectors,
- Despite the backdrop of copper near record highs and a still‑elevated base‑metals complex. [15]
The result is a familiar 2025 story: resources are being tugged in two directions at once—strong long‑term demand for metals versus short‑term jitters about rates and global growth.
Lithium and battery metals remain a bright spot
If gold names are dragging, lithium is still one of the market’s live wires:
- On Monday, Liontown (LTR) jumped about 14–15%, and Pilbara Minerals (PLS) gained more than 6% after UBS flagged the risk of a lithium shortage by late 2026, prompting a sector‑wide rerating. [16]
- Today, Liontown is again in the spotlight after announcing a binding offtake agreement with Canmax Technologies for 150,000 wet metric tonnes of spodumene concentrate per year in 2027–28, with pricing tied to published spodumene indices. [17]
That deal deepens Chinese integration into Australia’s lithium supply chain and reinforces the idea that structural demand for battery materials could outlive the current rate‑driven volatility. [18]
Nickel and other battery metals are also on the move: Nickel Industries (NIC) and IGO sit among the top ASX 200 gainers this morning, reflecting selective buying in the broader energy‑transition complex. [19]
Financials and defensives: grinding, not flying
Financials remain in focus due to their heavy index weight and sensitivity to rates:
- YTD, the ASX 200 financials sector is up only about 3–4%, after a sharp fall in November, according to IG’s 2026 outlook. [20]
- Inside Adviser’s performance table shows that while banks have provided some support in recent weeks, the resources sector has done the heavy lifting, with roughly 28% gains over the past year versus much more modest returns from financials. [21]
Defensive areas like utilities and industrials have actually been among 2025’s quiet outperformers, delivering mid‑ to high‑single‑digit gains. [22]
Stock stories to watch on the ASX today
Bapcor plunges on guidance cut
One of the biggest moves on the board is Bapcor (BAP), whose shares are down roughly 15–16% in early trade, hovering around the $2 level. [23]
MarketIndex notes that the company has:
- Cut its FY26 underlying NPAT guidance to around $44–49 million, a decline of more than 40% year‑on‑year,
- Landed about 15% below Citi’s prior earnings forecasts, and
- Is now down roughly 56% year‑to‑date, with short interest near 6%, raising the risk of volatile squeezes around any future news flow. [24]
It’s a classic “earnings‑reset” trade: the stock is being repriced lower as investors digest weaker trading in October–November and a reduced profit trajectory, even as management continues a multi‑year transformation program.
Liontown’s Canmax deal extends lithium narrative
Beyond its recent UBS‑driven bounce, Liontown’s new offtake deal with Canmax Technologies adds a more structural layer to the story:
- 150,000 wmt per year of spodumene concentrate in 2027–2028,
- Pricing formula linked to benchmark spodumene indices,
- Further validation of Liontown’s Kathleen Valley project as a long‑term cornerstone asset in the EV supply chain. [25]
Investors are reading this as a sign that battery‑metal demand remains robust beyond the current economic cycle, even as short‑term sentiment swings with every move in bond yields and RBA commentary.
Life360 and tech: sentiment reverses after a big run
Life360 (360) is one of the day’s notable losers, down about 4% after a business update call that focused on 2026 synergies from its newly acquired TiVo assets. [26]
Key points from the update:
- The TiVo deal is expected to close in early 2026,
- Management is targeting revenue and cost synergies that make the acquisition EBITDA‑accretive from day one,
- Off‑platform advertising inventory enabled by TiVo is around 30x the size of Life360’s current in‑app inventory, potentially transforming ad reach over time. [27]
Despite those long‑term positives, the stock is giving back part of a strong November rebound, highlighting how 2025’s beaten‑up tech cohort remains highly sensitive to any sign of delay or uncertainty.
Light & Wonder rallies on strong sentiment and broker support
At the other end of the leaderboard, Light & Wonder (LNW) is among the top ASX 200 gainers, up nearly 3% intraday. [28]
The gaming and lottery group has enjoyed:
- Positive sentiment following its standard listing on the ASX in November, and
- A price‑target upgrade from US broker Benchmark, which recently lifted its target from US$90 to US$110 while reiterating a Buy stance, reflecting confidence in its earnings and omnichannel strategy. [29]
National Storage REIT: M&A and the hunt for yield
One of the year’s standout corporate stories is National Storage REIT (NSR), which has agreed to a A$4 billion takeover by a Brookfield–GIC consortium at A$2.86 per stapled security, a premium of more than 25% to its late‑November price. [30]
The deal:
- Sent NSR to a record high around A$2.81,
- Marks the largest take‑private of an Australian listed real‑estate firm to date,
- Reinforces the idea that global capital still sees value in Australian real assets, even in a higher‑for‑longer rate environment. [31]
How analysts see the ASX 200 into 2026
With the index hovering in the mid‑8,000s, the big question is whether Australian equities still offer attractive upside into 2026.
Valuation: not cheap, but not absurd
IG’s ASX 200 2026 outlook notes that:
- The index is trading on a 12‑month forward P/E of about 18.1x,
- That’s above its long‑term average of roughly 14.8x, meaning Australia is no longer obviously cheap,
- Yet 2025 has still seen the ASX underperform some global peers, thanks to its relatively low exposure to high‑flying tech stocks and the drag from resurgent inflation and a more restrictive RBA. [32]
Sector‑wise, IG highlights that in calendar 2025:
- Materials, industrials and utilities have been the strongest performers,
- Health care and information technology are the only major sectors negative for the year, with IT down double digits. [33]
That backdrop fits what we’re seeing today: cyclical and resource names are still where the action is, while high‑multiple growth names are more fragile.
Strategist outlooks: cautious optimism
Several major houses have published 2026 outlooks in recent weeks:
- Morgan Stanley has set an end‑2026 target for the ASX about 10% above current levels, arguing that steady global growth, strong population dynamics and ongoing demand for commodities should support earnings – as long as valuations don’t stretch further and corporate margins hold up. [34]
- A December note from BetaShares suggests that after this year’s wobble, relative valuations for Australian equities have improved, lifting their 12‑month expected return profile to something closer to “neutral”, while warning that a prolonged RBA pause – or eventual hike – may cap how far multiples can expand. [35]
- A Commonwealth Private outlook emphasises the role Aussie equities can play in global portfolios precisely because the ASX is tilted towards materials and financials and away from mega‑cap US tech, offering diversification of cash‑flow drivers at a time when AI‑related concentration risk in US markets is becoming extreme. [36]
Add in weekly commentary from local strategists – such as Pendal’s Jack Gabb, who this week highlighted diverging US and Australian bond yields and the dominance of central‑bank meetings in setting the tone – and a picture emerges of a market that is not in crisis, but not yet cheap enough to ignore macro risk either. [37]
Big themes for Australian investors to watch
Pulling today’s trade together, several themes stand out for anyone following the Australian stock market today:
- Rates and central banks:
A “hawkish hold” from the RBA, layered on top of the Fed’s decision later in the week, will shape everything from bank margins to REIT valuations. Markets are no longer confidently pricing cuts; a longer plateau – or eventual hike – is firmly on the table. [38] - Commodities vs. growth fears:
Metals like copper are flirting with record highs on supply concerns and China demand hopes, while gold and energy have been choppy. The ASX remains one of the purest plays on this tug‑of‑war. [39] - Lithium and battery metals as a structural story:
The combination of UBS’s sector upgrade, Liontown’s Canmax offtake, and sustained corporate interest in the broader energy‑transition complex suggests this theme is far from over, even if price cycles remain brutal. [40] - Earnings downgrades and stock‑specific risk:
Bapcor’s sharp fall on weaker guidance is a reminder that valuation alone isn’t a safety net when fundamentals reset. The same applies to rate‑sensitive REITs, discretionary retailers and leveraged growth names. [41] - M&A and global capital flows:
Deals like Brookfield and GIC’s A$4 billion bid for National Storage REIT show that deep‑pocketed investors still see value in Australian assets, particularly where cash flows are relatively stable and scalable. [42]
For now, the ASX 200 is reflecting all of this in a fairly literal way: stuck in a tight range, modestly weaker on the day, yet underpinned by powerful long‑term forces in commodities and population growth.
Once the RBA’s 2:30 pm decision and accompanying statement hit the wires – and the Fed follows suit later in the week – we’ll have a much clearer sense of whether Australian equities are set up for a year‑end grind, a Santa rally, or something more dramatic in early 2026.
References
1. www.marketindex.com.au, 2. www.livemint.com, 3. www.abc.net.au, 4. www.marketindex.com.au, 5. www.theaustralian.com.au, 6. www.reuters.com, 7. www.swissinfo.ch, 8. www.rba.gov.au, 9. www.reuters.com, 10. www.reuters.com, 11. www.livemint.com, 12. www.rba.gov.au, 13. www.livemint.com, 14. insideadviser.com.au, 15. www.marketindex.com.au, 16. insideadviser.com.au, 17. www.ltresources.com.au, 18. miningcomm.com, 19. www.marketindex.com.au, 20. www.ig.com, 21. insideadviser.com.au, 22. www.ig.com, 23. www.marketindex.com.au, 24. www.marketindex.com.au, 25. www.ltresources.com.au, 26. www.marketindex.com.au, 27. www.marketindex.com.au, 28. www.marketindex.com.au, 29. uk.investing.com, 30. www.reuters.com, 31. www.reuters.com, 32. www.ig.com, 33. www.ig.com, 34. www.afr.com, 35. www.betashares.com.au, 36. www.commbank.com.au, 37. pendalgroup.com, 38. www.reuters.com, 39. www.reuters.com, 40. insideadviser.com.au, 41. www.marketindex.com.au, 42. www.reuters.com
