Sydney, Jan 24, 2026, 17:01 AEDT — Market closed
- Xero closed Friday on an uptick, bouncing back after hitting a new 52-week low just the day before.
- Tech stocks outpaced the wider market as investors adjusted their views on rates and risk.
- Traders are now eyeing inflation figures alongside Xero’s upcoming earnings report for guidance.
Xero Limited shares climbed 3.54% on Friday, closing at A$101.22 and reclaiming the A$100 mark after hitting a 52-week low just the day before. The stock fluctuated between A$98.40 and A$102.99 during the session. It still sits roughly 48% below its 52-week peak of A$194.21 reached in June, with a market capitalization near A$17.2 billion.
This shift is crucial, landing just before a long weekend and following a tough stretch for rate-sensitive growth stocks. Investors have been swift to trim and take on risk this month, with high-multiple software names bearing the brunt of the volatility.
Xero often behaves like a “long-duration” stock, a term for firms whose valuations hinge on profits expected well into the future. Rising bond yields usually push down the present value of those future earnings, sending shares lower quickly.
Australia’s benchmark index edged up Friday, with technology stocks leading the way thanks to a surge of more than 27% in Life360. The market was also buoyed by a Wall Street bounce after U.S. President Donald Trump eased off on additional tariff threats and the Greenland issue, ABC reported.
Some 1.53 million Xero shares traded on Friday, with turnover hitting about A$153 million, MarketIndex data shows.
The rebound came after Thursday’s session saw local bond yields climb, driven by an unexpected drop in unemployment. This sparked speculation about a February rate hike from the Reserve Bank of Australia, putting pressure on market segments tied to rate forecasts.
Dr Shane Oliver, AMP’s head of investment strategy and chief economist, said the “December quarter CPI data due Wednesday will be key” in deciding if the RBA holds rates or hikes. He noted the money market “now sees around a 57% chance of a February rate hike.” AMP
Xero offers cloud-based accounting software primarily to small businesses, mostly through subscription plans. Investors tend to zero in on customer growth, pricing power, and the company’s ability to scale without ramping up spending—especially given the intense competition in accounting and payments software.
But the bounce back leaves a bigger question hanging: are investors ready to pay a premium for software stocks if rates remain stubborn? If inflation surprises on the upside or yields climb further, the sector could take another hit. Even shares that have already dropped sharply might face new selling pressure.
Australian equities will resume trading on Tuesday, following the ASX’s closure Monday for the Australia Day public holiday, according to the exchange’s trading calendar.
Xero’s next major event is its FY26 full-year results for the year ending March 31, set for release on May 14, per an ASX announcement.
