Overall, the local bourse ended the 12 months to June 30 in the green but sharply underperformed against overseas markets, as miners again lead the way for investors.
But the technology and health care sectors racked up losses of almost 40 per cent.
The benchmark S&P/ASX200 index finished 2025/26 up by a less-than-stellar 2.8 per cent - its worst performance in a financial year since a 10.2 per cent loss in 2021/22.
"It's pretty soft," AMP chief economist Shane Oliver said while noting how well overseas markets had performed.
For instance, the US S&P500 index rose 20.9 per cent in 2025/26 and Japan's Nikkei 225 soared a stunning 73 per cent.
The global benchmark for developed nations, the MSCI World Index, delivered a 19 per cent return.
"So well and truly laggard," Dr Oliver said.
The Australian bourse was doing quite well until late February, when the US attacked Iran, sparking the Middle East conflict - a war that's yet to be finally resolved.
At the same time, the Reserve Bank of Australia raised interest rates in February, March and May, as other major central banks left theirs on hold.
"The more aggressive approach by the RBA didn't help," Dr Oliver said.
"Then the tax changes in the (federal) budget probably put a bit of a cloud over the market in the latter part of the financial year."
Still, if company dividends are included, the S&P/ASX200 did post a stronger return of 6.1 per cent, beating most bank deposits.
Asset manager Schroders Australia said that overall, the year wasn't as bad as it could have been, given the war.
"You would see quite a lot of investors get some pretty good profits from the financial year," investment leader Sebastian Mullins told AAP.
The big winners in 2025/26 were the miners, including rare earths producer Elevra Lithium, which gained a massive 327 per cent to close out the year at $9.60 with a market value of almost $2 billion.
The materials sector, made up mostly of mining companies, grew by 48 per cent and was by far the best performing sector across the market.
"If you had enough resource stocks, you had a reasonably good year," Â Schroders' Australian equities head Martin Conlon said.
That includes technology-leaning stocks such as WiseTech Global, which was the biggest laggard in the S&P/ASX200 index.
It dropped 70 per cent to end 2025/26 at $33 a share, ending the year with a market value of $11 billion.
WiseTech was followed by Kiwi cloud accounting platform Xero, which shed 60 per cent over the year.
Overall, the market's health care and technology sectors both lost 37 per cent.
Australia-based hearing implant company Cochlear lost 60 per cent while blood products giant CSL shed about 51.8 per cent to round out the worst five losers in the S&P/ASX200.
Other top gainers included another lithium miner PLS Group (up 270 per cent), gold miner Minerals 260 (up 534 per cent) and defence manufacturing company Electro Optic Systems (up 256 per cent).
The consumer staples sector, which includes companies like Coles and Woolworths, also had a good year with a gain of 10 per cent.
But the biggest mover for the year in the S&P/ASX200 index was biotechnology firm 4DMedical, which delivered investors a stellar 1,787 per cent return.
The lung function products maker's shares soared from 24 cents to more than $6 in May before settling back around $4.50 by year's end.
13°C