Business Environment Profiles - Australia
Published: 09 August 2024
All Ordinaries index
7818 Index
3.9 %
This report analyses the All Ordinaries index. The All Ordinaries index is a share price index, which comprises the 500 largest companies listed on the Australian Securities Exchange. Companies are ranked by market capitalisation, which is the only requirement for inclusion in the index. The All Ordinaries is a non-float adjusted, market capitalisation weighted, price index. The data for this report is sourced from Yahoo Finance and is represented by an average of the daily index points at close over each financial year.
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IBISWorld forecasts the All Ordinaries index to rise by 2.2% during 2024-25, to average 7,817.6 index points. Growing total business profit figures and improvement in business confidence are expected to support the value of the index in the current year. Yet, elevated interest rates in response to lingering inflationary pressures are on track to continue to constrain business expansion and investment in equities, hindering growth in the index.
Largely consistent cuts to the cash rate by the RBA during the beginning of the past five years have contributed to growth in the All Ordinaries index as it drove up stock valuations. Furthermore, robust growth across the technology sector over the past five years has supported a rise in the index. In addition, local interest rates remained higher than interest rates in other developed countries for much of the period. For this reason, Australia remained an attractive place to invest, driving greater demand for shares in local companies and pushing up the All Ordinaries index.
The index has grown strongly over most of the past five years, due to rising commodity prices and business profit. The domestic price of black coal has risen over the period, with a sharp increase in 2021-22 due to supply constraints and global gas shortages. The All Ordinaries index dropped in 2022-23, as negative business confidence and consecutive interest rate hikes weighed on business expansionary activities. Even so, The All Ordinaries index hit a record high in August 2024 following indications of easing inflation and strong bank stocks. Overall, IBISWorld forecasts the All Ordinaries index to rise at a compound annual rate of 2.2% over the five years through 2024-25.
IBISWorld forecasts the All Ordinaries index to average 7993.0 index points in 2025-26, rising by...
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