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Global markets moved higher over the September quarter as confidence grew in a soft landing for major economies and a gradual shift towards monetary easing. Easing inflation pressures and more balanced central bank messaging supported sentiment, while volatility remained subdued. Overall, risk appetite improved as investors became more optimistic about the outlook for growth and policy settings heading into year end.
Australian Equities
The ASX 200recorded its 2nd quarterly gain for the year, rising through a period that provided a volatile reporting season as well as an improving investor sentiment as inflation looked to stabilise before a slightly concerning monthly print.
Australian Equities rose 4.71% across the quarter with Materials the best performer+18.65%, followed by Utilities +9.5% and Consumer Discretionary +9.06%. The main laggards were Healthcare which suffered from a slew of poor earnings, falling -10.06% across the quarter, while Energy continued its poor year -3.95%and Consumer Staples rounded out the 3 sectors in negative territory falling-3.09%.
At the stock level, DroneShield (DRO) was the standout performer, surging 104.4% after delivering a strong earnings result and announcing new contract wins in defence technology. The weakest performer was Boss Energy (BOE), which fell -55.9% amid weaker uranium prices and production delays at its Honeymoon project.
International Equities
The MSCI World ex‑Australia Total Return Index(AUD) rose 5.94% in the September quarter, supported by an easing bias from the US Federal Reserve Bank, signs of a cooling US labour market, and lower bond yields that boosted risk assets.
US equities led the gains, with the S&P 500up 7.04%, the Nasdaq rising 8.07%, and small caps outperforming, as the Russell2000 climbed 11.24%. Europe also contributed positively, with the Euro Stoxx up3.11% and the FTSE 100 gaining 4.02%.
Technology and AI‑linked names, alongside resilient corporate earnings, drove broader participation, helping offset ongoing geopolitical and inflationary uncertainties.
Real Assets
Listed infrastructure had a strong quarter, delivering 4.54% in AUD-hedged terms while listed property was similarly strong, rising 4.31% in AUD-hedged terms.
Fixed Income
Bond returns were positive but lagging their varying asset classes as global yield curves drifted lower over the course of the quarter, with the majority of the move in September as the potential of a US government shutdown loomed. The Bloomberg AusBond Composite up 0.4% and the Bloomberg Global Aggregate (AUD-hedged) up1.02%.
Currency Markets
The U.S. Dollar Index (DXY) rose by 0.93% over the quarter to about 97.77, its first positive quarter for the year, as markets re-priced a potential September Fed cut to no cut. The AUD was also positive as rate expectations shifted locally, finishing+0.49%, at 66.13c, up from 65.81c.
Commodities
Commodities were mixed over the month with oil falling for a 2nd consecutive quarter, down 0.87%, while gold (+16.83%) and silver (+29.18%) surged.
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