Australian shares finished the year stronger, though they inched lower on Friday, recovering from the pandemic-driven losses last year amid challenges from the highly contagious new variants of the coronavirus.
The S&P/ASX 200 index gained 13% in a year marked by record dealmaking activity and initial public offerings amid accelerating inflation and COVID-19 concerns.
The benchmark slipped about 1% to 7,444.60 points in the holiday-shortened last trading session of the year, snapping a six-day Christmas rally.
"All markets have had a really good year. At the end of the day, it's all driven by balance sheet expansion from the central banks," said Mathan Somasundaram, chief executive officer at Deep Data Analytics.
Australian banks, one of the top weighted sectors in the benchmark, logged their best year since 2013, adding 20.2%.
All top four banks in Australia registered double-digit annual growth, rising between 10% and 28% this year.
Banking stocks were cheap last year, but are expensive now as they are linked to property prices, and the upside is probably limited, Somasundaram added.
Heavyweight miners extended gains for a sixth straight year, up about 5%, due to recovery in global economy and lingering concerns over metal supply.
However, global miners Rio Tinto and BHP Group ended the year in red after gaining for five years, dropping 9.5% and 2.2% respectively.
The energy sector, which nosedived about 30% in 2020, was little changed even as oil prices were on track to post their biggest annual gains in 12 years after economic activity in Australia and around the globe gained momentum this year.
Tech stocks posted annual losses for the first time since 2011, shedding 2020 gains, their best year.
The sub-index lost about 2.8% in 2021 as the buy now pay later firms lost their shine, with sector leader Afterpay shedding about 30%.
New Zealand's benchmark S&P/NZX 50 index ended the year flat, ended marginally lower at 13,033.77 on Friday, after advancing for nine consecutive years.
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