November In Review: November’s Nasty Nexus

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A meaty sell off in banks, technology large cap stocks dragged down the ASX200 to its worst performance since April, while gold stocks continued to shine.

• Gold surges and banks slide as cautious sentiment hits the ASX200
• Higher inflation fears revive rate hike pricing and spark sector rotation
• Technology leads declines while Materials and Healthcare hold up
• Brokers see a tricky 2026 backdrop but December seasonality offers hope

By Danielle Ecuyer

Quelle horreur, a month to forget, or a month to celebrate?

“Australian shares recorded their worst November in more than a decade.”

That’s how Morgan Stanley Wealth Management summarised November 2025 for the ASX.

If that rings true, then the pit in your stomach of what is normally one of the best trading months of the year was probably justified.

At one point the ASX200 was down -7.7% from its all time high of 9,115 in mid October, the steepest fall since the April Liberation Day-related drawdown.

A combination of factors blended into a toxic cocktail of profit taking and risk off sentiment, as evidenced by the ongoing outperformance of gold and gold stocks.

The Australian gold sector has doubled over the last year, including a gain of 10% in November. The precious metal itself lifted 5.7% over November, bringing the one year gain to 59.7%.

Given the currency uplift for Australian producers from a relatively weak Australian dollar, it isn’t hard to appreciate why domestic gold stocks have performed so well.

Telco stocks lifted that sector to a gain of 27% over the last year, making it the second best performer locally. 

A month end rally couldn’t save the local market

Although the Australian market recovered off its lows with a late month rally, the ASX200 index still retreated for a negative total return of -2.7% (-3.01% sans dividends) over November, which ranked it just behind the Nikkei225 Index which fell -4.1%, with MSCI Emerging Markets down -1.6%.

By comparison, the S&P500 scrapped over the line with a 0.2% rise, the FTSE100 lifted 0.4%, EuroStoxx50 added 0.3%.

The whiff of higher inflation and a potentially more hawkish central bank became more prevalent in November, which has leaked into the start of December.

Domestically, as highlighted by Morgan Stanley Wealth Management, the RBA held the cash rate steady at 3.6% at its November meeting, a unanimous decision.

Since then, the hotter than anticipated October CPI print has raised the spectre the next move for the RBA cash rate is up.

Macquarie views the hawkish shift from the RBA and the Federal Reserve’s FOMC meeting commentary from Fed Chair Powell as in part responsible for the risk off behaviour. The extended US shutdown was also isolated as a contributory factor.

Market pricing has swung towards rate hikes in Australia with 14 basis points of RBA rate hikes currently priced by December 2026, with most commentators now expecting the RBA to remain on hold in the foreseeable future.

By comparison, the Federal Reserve has signaled an end to QT (Quantitative Tightening) and US markets are currently ascribing an 87% probability of a -25 basis point rate cut at the December 10 FOMC meeting, as more dovish commentary has emerged from Federal Reserve Governors. 

A roller coaster ride across sectors, and stocks

Under the surface, sector performances continued to diverge with quite disparate moves which means if you weren’t disproportionately overweight gold stocks, the month of November was one to largely forget.

Banks finally succumbed to some hefty profit taking; finally!, sector analysts must have been thinking.

The sector fell -7%, its worst monthly performance in over a year. As noted by Morgan Stanley, banks’ weakness took -176 basis points off the broader index return.

In contrast, Materials led with Healthcare, adding 33bps and 15.6bps, respectively to the index. CSL ((CSL)) contributed 14.3bps, the most to the monthly index performance.

Northern Star ((NST)) contributed 13.6bps, with Pilbara Minerals ((PLS)) adding 8.5bps, and Evolution Mining ((EVN)), 7.7bps.

In contrast, major big cap stocks like CommBank ((CBA)) detracted -119.3bps, BHP Group ((BHP)) -34.1bps, National Australia Bank ((NAB)) -30.8bps, Goodman Group ((GMG)) -25.1bps and Macquarie Group ((MQG)) -24.7bps.

By way of interest, November also marks the final stage of reporting season for out of June year end cycle companies, including Macquarie and the banks (ex CommBank) generating an earnings miss from NAB and Macquarie while ANZ Bank ((ANZ)) and Westpac ((WBC)) performed in line with expectations.

Macquarie calls time on the valuation de-rating for technology stocks and the hawkish shift in central bank messaging as the reason for why this sector was the worst performer over November, down -10%.

The sectorial de-rating included a downgrade in earnings forecasts with forward EPS estimates lowered by nearly -9%, so the generally lower price to earnings valuation accounts for just -2bps of the fall.

(For more details on the earnings reports, see FNArena’s Corporate Results Monitor which has registered 14 beats of 28.6%, 16 in line reports of 32.7% and 19 misses or 38.8%, details can be seen at this link https://fnarena.com/index.php/reporting_season/)

Shares in TechnologyOne ((TNE)) fell -17.6%, with only Life360 ((360)) suffering more (-18.8%), followed by Xero ((XRO)) and NextDC ((NXT)) shares down -15.7% and -13.9%, respectively. Shares in Block ((XYZ)) and Seek ((SEK)) were also under pressure, alongside previous winners including Aristocrat Leisure ((ALL)), Hub24 ((HUB)) and REA Group ((REA)).

All are part of the worst performing stocks inside the ASX100.

Light and Wonder ((LNW)) in comparison topped the best performing list over the month for the ASX100, up almost 40%, with IGO Ltd ((IGO)), Perseus Mining ((PRU)) and Ramsay Health Care ((RHC)) some of the top ten performers.

Laggards WiseTech Global ((WTC)) and CSL ((CSL)) finally found some love, along with Woolworths Group ((WOW)), moving them into the top performers for the ASX100.

What factors impacted on earnings and valuations

Turning to the market’s valuation, Morgan Stanley notes the valuation ascribed to the ASX200 moved lower on a 12-month forward multiple by -0.9 P/E points to 18.1 times. The adjustment consists of a mix of upgraded aggregate consensus earnings forecasts and a decline in the index.

The broker notes consensus earnings levels for FY26/FY27 are now up 3.9%/4% above the September trough, with EPS growth estimated 7.8% and 7.9%, respectively, for FY26/FY27.

Materials has been the most dominant contributor in earnings upgrades, with positive commodity price indications and supply side factors, including a more upbeat outlook for China moving from deflation.

Over November thermal coal, up 6.5%, was the standout commodity, after gold, but its pricing remains down -21.8% over one year. By comparison, precious and industrial metals are up 58.3% and 15.9% over the last year, respectively.

Energy is up 4.5% with iron ore up 4.4% over the same period.

Looking at the Small Ords, UBS points to PMET Resources ((PMT)) and HMC Capital ((HMC)) as stand outs, respectively up 37.5% and 24.8%, while DroneShield ((DRO)) shares fell -48.3% after the founder/CEO dumped his -$50m stake on the market.

Shares in online retailer Temple and Webster ((TPW)) fell -34.8% after an earnings miss; slowing sales momentum also featured in market updates by bricks & mortar peers and competitors.

Surprisingly maybe, but in quant terms Quality outperformed Value, down -1.4% versus -3.5%, and Growth down -3.8%.

Macquarie observes large cap (market capitalisation) stocks underperformed Small Caps by -1.8% which followed a similar trend in the US.

The Macquarie FOMO Meter slipped back to positive 0.71, equating to a positive mood generally but not euphoric at the end of the month.

December is usually the best month, how likely is it?

Looking ahead, the Fed is expected to continue cutting rates whereas the next move for the RBA looks likely to be a cash rate hike (not necessarily in 2026).

For Macquarie this is not necessarily a “bad” backdrop for local equities, which can still post positive returns in the lead up to rate rises. It is likely to underpin, however, ongoing sector rotation to Late Cycle Cyclicals such as resources from Early Cycle Consumer sectors, as has been the trend in the last couple of months.

Morgan Stanley sees the outlook as more nuanced or “tricky” with a fresh ASX200 12 month target of 9,250, inferring some 7% upside from current levels.

From a global perspective, this broker believes there is an “unusually” wide range of possible outcomes in 2026 for growth and inflation. On balance, equities remain recommended over credit and government bonds with a strong preference for US assets.

The USD and yield on US 10 year treasury are expected to trend lower over 1H26 and the Australian dollar to move higher.

Since 1973, December has been the Australian market’s strongest month, UBS exclaims, with a one month average price return of 2.1%.

If the historical trend is set to repeat, the ASX200 has scope to trend back towards 8,800 by year end.

ASX100 Best and Worst Performers of the month (in %)

ASX200 Best and Worst Performers of the month (in %)

ASX300 Best and Worst Performers of the month (in %)

ALL-TECH Best and Worst Performers of the month (in %)

All index data are ex dividends. Commodities are in USD.

Australia & NZ

The World

Metals & Minerals

Energy

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