Market Update - Month Overview (June 2026)

Summarised by Shara Cox (Report via Zenith)

Australian Market Summary

Australian shares delivered a modest gain in June, rising 0.7%, but continued to trail global markets due to the local market's lower exposure to technology and artificial intelligence sectors that have driven much of the recent global growth. Investor sentiment was supported by easing concerns over Middle East tensions and signs that inflation pressures are gradually moderating. Headline inflation eased to 4.0% in May, while softer economic data, weakening house prices and slower employment growth led markets to scale back expectations of further RBA rate increases. Australian bond markets responded positively, with 10-year government bond yields falling over the month. Meanwhile, the Australian dollar weakened against the US dollar as commodity prices retreated and the interest rate outlook between Australia and the US narrowed.

Sector performance was mixed, with consumer staples, healthcare and industrials among the strongest performers, while energy and materials declined as oil, iron ore and other commodity prices fell from earlier conflict-driven highs. Despite ongoing economic headwinds, the moderation in inflation and reduced expectations for additional monetary tightening provided some support for Australian financial markets heading into the new financial year.

International Markets:

Global markets finished the financial year on a strong note, with investors becoming increasingly confident that conflict in the Middle East would not escalate further. This optimism helped drive a sharp fall in oil prices, easing inflation concerns and reducing expectations of additional central bank tightening. Global developed shares rose strongly during June, while emerging markets also posted solid gains, supported by improving global manufacturing conditions and continued demand linked to the artificial intelligence and semiconductor sectors, particularly in Korea and Taiwan.

Bond markets also benefited from the improving inflation outlook, with falling oil prices helping to push inflation expectations back towards central bank targets. In the United States, softer-than-expected employment growth reduced pressure on the Federal Reserve to raise rates further, supporting both equities and fixed interest markets. Global listed property and infrastructure assets continued to perform well, underpinned by long-term themes such as growing AI-related electricity demand, energy security investment and easing bond yields. Overall, international markets remained resilient and continued to outperform Australian equities over the month.