International | 1:17 PM
- ASX200 loses -0.8% (total return) in September
- Materials the only winning sector
- Gold the substantial driver of materials
- Weak month for some favoured heavyweights
By Eva Brocklehurst
September is, historically, the worst month of the year for the stock market. However, that trend has become diluted over recent years.
The trend more specifically pertains to Wall Street, to which the ASX200 has historically been anchored, but that correlation has also become diluted in recent years on a divergence of market-driving sectors.
Yet, September this year was indeed a weak month for the Australian stock market, breaking a five-month winning streak for the ASX200. The index closed down -1.4% for the month, for a total return of -0.8% (including dividends).
By contrast, the S&P500 rose 3.5%, underscoring diminishing correlation. The clue here is in the Nasdaq, which shares the Magnificent Seven with the wider index and rose 5.6% on the ever-inflating AI theme.
For Australia, index performance would have been substantially worse if not for the contribution of the materials sector, completely dominated in the month by the ongoing surge in the gold price.
Excluding dividends, the ASX200 materials sector rose 4.6% in September, to be the only sector with a positive performance for the month. All other sectors saw losses, led by energy (-10.6%), consumer staples (-5.6%) and healthcare (-4.9%) in terms of percentage moves, and financials (-1.5%) in terms of market cap impact.
Glittering
Within materials, the gold miner sub-index rose 24.4%. History shows gains in gold mining stocks typically lag gains in the gold price. This has again been the case in 2025. It takes a while for investors to cotton on.
While the energy sector is beholden to oil prices, September’s withdrawal of Abu Dhabi National Oil Co’s (consortium) takeover bid for Australia’s second largest oil & gas producer Santos ((STO)) dragged down all energy peers. It is questionable whether the bid would have ever made it past the FIRB.
Within financials, falls in financial services and insurance companies drove weakness more so than banks, albeit some of the gloss came off Commonwealth Bank ((CBA)) in the month. The RBA’s on-hold September rate decision was also a drag.
Gold Outperformance
Returning to gold, outperformance was not constrained to ASX200-listed miners. Morgan Stanley points out while there were 30 gold miners in the Small Ordinaries index in 2012 and only 18 now, gold’s weighting within the sector has reached 14% of all small caps.
Within large caps, the addition of Genisis Minerals ((GMD)) and Ramelius Resources ((RMS)) into the ASX100 has taken gold stocks to 3.6% of all large caps, eclipsing 2012 levels and matching the covid peak.
Technical limitations
If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.
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