Australian shares end flat in thin year-end trade; miners shine, banks drag

Australian shares ended flat on Wednesday in subdued, holiday-thinned trade, closing out the final day of the year with exaggerated sector moves as losses in financials offset gains in mining stocks.

The benchmark S&P/ASX 200 index finished 0.03% lower at 8,714.3 points, with turnover running at about 40% of its 30-day average on a New Year’s Eve half-day session.

With many investors already on the sidelines ahead of the year-end break, reduced liquidity amplified intraday swings, a common feature of late-December trade. Despite the muted close, the benchmark marked its strongest monthly performance since August.

In 2025, the index rose 6.8%, a third consecutive annual advance, though it has underperformed major global equity benchmarks such as Hong Kong’s Hang Seng and Japan’s Nikkei which soared over 27%. Investors have navigated a year marked by shifting monetary policy expectations.

The Reserve Bank of Australia delivered three interest rate cuts earlier in the year, before a run of firmer inflation data in the second half prompted a hawkish pivot.

Markets are now pricing in a higher-for-longer rate environment in 2026, reshaping positioning across interest-sensitive sectors as the year draws to a close.

Anthony Doyle, chief investment strategist at Pinnacle Investment Management, said inflation pressures in Australia remain unresolved, supporting equity exposure to companies with strong pricing power and the ability to pass higher costs on to

 customers. On the day, banks lost 0.4%, with the ‘Big Four’ banks losing between 0.1% to 1.1%.

The sub-index still saw its best month since June.

Miners added 0.6% as iron ore and copper prices made a recovery overnight.

The gauge closed at its all-time monthly high while also marking its best year since 2016.

Gold stocks rebounded after two sessions of losses, up 0.8%.

The sub-index stood out as the top performer of 2025, more than doubling in value and heading for its best year on record.

New Zealand’s S&P/NZX 50 index ended flat at 13,548.42, rounding out the year with a third consecutive annual gain.