Technology race sends global sharemarkets running
July 2024
The second quarter of 2025 started with a selling frenzy as the U.S. administration’s Liberation Day tariffs shook global sharemarkets in April. However, investors that held their nerve over the quarter saw global sharemarkets return to positive territory by the end of June.
Helping global shares climb 6.4%1 over the three months was a return to the artificial intelligence (AI) thematic, with mega names such as Nvidia, Microsoft and Amazon leading the charge. Assisting to further kick-start the rise was the short-term resolution of tariffs, TACO (Trump always chickens out) trades, the elimination of Section 899 in the Big Beautiful Bill, reduced U.S. recession risk and the easing of tension in the Middle East.
Australian shares rose 9.5%2 over the quarter, and the most obvious outperformer was Commonwealth Bank. Not even a May rate cut and a dovish stance from the RBA could slow Australia’s largest bank with its share price rising 22.4% between April and June.
Riding on the wings of their U.S. counterparts, the star performers in Australia also came from technology shares which collectively saw an increase of 26.9%3 over the quarter. This was led by location-based networking app Life360 (up 62.4%)4, while WiseTech Global (up 34.2%)5 was a good turnaround story. In the first quarter, WiseTech copped a beating over governance issues and found itself caught up in DeepSeek hype and an unwinding of tech stocks. Software as a service provider TechnologyOne also contributed well for Aussie shares, seeing a rise of 47.5%6 between April and June.
In Asia and keeping with the global rally in technology, Taiwan Semiconductor Manufacturing Company (TSMC) rose more than 17%7 for the quarter. Overall, both European and Asian shares produced slightly softer results than the U.S. and Australia over the first half of the year but were still solid contributors to portfolios.
Fixed interest had a so-so quarter posting a return of 2.6%8. Tensions over the inflationary impact of tariffs and the growing U.S federal budget deficit did see bond returns weaken. Coming into the quarter a short position on credit was made as high-yield credit spreads were at a level indicating a five to 10% U.S recession risk, which was an extremely confident outlook. This short position was sold incrementally over the quarter as investor sentiment tipped slightly higher on a U.S recession. Australian and Canadian government bonds remained attractive as defensive positions.
Property did produce a notable mention through the quarter too, up 12.9%9. Increased exposure to REITs, both globally and in Australia was a positive move. The worst of the property write downs subsided in the second quarter, and greener pastures were seen for Australian office and industrial property, as well as U.S office property.
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1 Bloomberg
2 MSCI ACWI TR in AUD, Bloomberg
3 Bloomberg
4 Life360, Bloomberg
5 Bloomberg
6 TechnologyOne, Bloomberg
7 Taiwan Semiconductor Manufacturing Company, Bloomberg
8 Bloomberg Ausbond Composite Index
9 AREITS sector, Bloomberg
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