Having risen nearly 8% in the 2023-24 financial year, the ASX 200 is now hovering around record highs. And when dividends are included, Australia's benchmark stock index has gained more than 12%.
But looking across the sectors, not all sectors performed well.
What did well?
Financials
The financial sector has been the primary driver of these gains.
National Australia Bank (NAB) shares surged 38% over the past year, reaching their highest value since December 2007, just before the global financial crisis.
Commonwealth Bank saw a 27% increase in its share price during the same period, briefly hitting a new record high of A$128.68 in late June.
Technology
The Tech sector was the standout performer on the ASX, up an impressive 30% increase over the past year.
Leading the charge were tech stocks such as Life360, which surged 120%, Altium with an 87% gain, Megaport up 66% and Zip (ASX:ZIP) Co soaring 252%.
Analysts attribute this growth to the positive sentiment in the US tech sector, which has had a significant influence on the Australian market.
On Wall Street, the Nasdaq jumped 32% over the past year, largely driven by artificial intelligence (AI) advancements. AI chipmaker Nvidia played a pivotal role, skyrocketing more than 200% and momentarily becoming the world's most valuable company, with a market value of US$4.67 billion.
Consumer discretionary
The consumer discretionary sector also held up surprisingly well — despite being in a per capita recession with people spending less —with the sector showing a remarkable 23% increase over the past year.
Standout performers in this sector include jewellery chain Lovisa (74%), Premier Investments (56%) – owner of Peter Alexander, Smiggle, Just Jeans and other retail brands – and JB Hi-Fi (43%).
What underperformed?
Consumer staples
Consumer staples, meanwhile, was the worst-performing ASX sector for the year, down 6%.
The sector was dragged down by Coles (-8%) and Woolworths (-15%) in particular. This was predominantly driven by cost-of-living pressures, pricing pressures and the political pressure being put on those companies.
Lithium
Dragged down by a 70% slump in the lithium price, lithium companies were some of the worst-performing stocks on the ASX — all of which are currently unprofitable.
Notable names include Core Lithium (-89%), Lake Resources (-86%), Piedmont Lithium (NASDAQ:PLL) (-83%), Global Lithium Resources (-82%), Galan Lithium (-81%), Sayona Mining (-78%) and Liontown Resources (ASX:LTR) (-68%).
Looking ahead
Many expect the ASX to hit new record highs this year, driven by hopes of the RBA cutting interest rates, but analysts also caution that there are significant risks ahead.
China, Australia's largest iron ore customer, is a primary concern due to fears of an economic downturn. The Chinese economy has been impacted by weak consumer sentiment and a prolonged property market slump.
Another risk is ongoing cost-of-living pressures and what that means for the Australian consumer, given that consumer spending accounts for around 60% of te country’s economic growth. A cut in spending could lift unemployment, while immigration cuts could result in weaker economic growth.