National

ASX Shares Plunge In Worst Rout Since 2012 After Tech Upgrade Shock 

T

Tanmay

May 26, 2026 5:24 PM IST

Category National

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Synopsis

Shares in ASX Limited slumped more than 12% on Tuesday after the exchange operator warned investors to brace for a sharp surge in technology and regulatory spending over the next two years. The sell-off…

Shares in ASX Limited slumped more than 12% on Tuesday after the exchange operator warned investors to brace for a sharp surge in technology and regulatory spending over the next two years. The sell-off marked ASX’s worst trading session since August 2012 as investors reacted to rising costs linked to major system upgrades, artificial intelligence investment and ongoing regulatory scrutiny.

Key highlights

• ASX shares plunged more than 12% on Tuesday
• The stock recorded its worst trading day since 2012
• ASX warned operating expenses could jump up to 21% in 2027
• Higher spending will fund technology upgrades, AI and compliance work
• ASIC previously criticised ASX over failed technology projects
• Capital expenditure forecasts were lifted for both 2027 and 2028

ASX Flags Sharp Rise In Costs

ASX said total expenses in 2027 could rise by as much as 21% compared with the previous year as it accelerates investment across its technology infrastructure.

The company also lifted its capital expenditure forecasts:

• 2027 capex forecast increased to A$180 million-A$200 million
• 2028 capex projected between A$170 million and A$190 million

ASX said spending would rise as it upgrades trading and settlement systems, improves automation and develops new products while simultaneously operating legacy and new systems.

The company is also investing more heavily in artificial intelligence and internal operational resilience.

ASIC Pressure Continues To Weigh

The higher spending comes after Australian Securities and Investments Commission criticised ASX earlier this year over repeated failures tied to major technology projects.

ASIC’s April inquiry found the exchange operator had suffered delays, budget blowouts and governance failures while prioritising shareholder returns over long-term infrastructure investment.

The regulator said ASX had relied too heavily on short-term fixes instead of addressing deeper operational problems.

In response, ASX acknowledged there had been historical underinvestment compared with global peers and said it was now moving faster to modernise its systems.

Investors Punish The Stock

ASX shares dropped as much as 12.6% to A$51.40 during Tuesday trading, dramatically underperforming the broader ASX 200, which slipped only marginally.

The decline wiped billions from the company’s market value as investors worried rising costs could pressure earnings and dividends in coming years.

Despite the spending increase, ASX maintained its already reduced dividend payout target of 75%-85% of underlying net profit after tax.

Revenue Growth Still Holding Up

The exchange operator said unaudited revenue for the 10 months to April 30 rose 12.5% to A$1.03 billion.

However, the stronger revenue growth failed to offset market concerns about the scale of future investment requirements and compliance costs.

The company’s 2026 expense growth forecast of up to 23% also includes costs associated with the ASIC inquiry.

FAQs

Q1: Why did ASX shares fall?

ASX shares plunged after the company warned of a major increase in technology and compliance spending over the next two years.

Q2: How much did ASX stock drop?

The shares fell more than 12%, marking their worst trading day since 2012.

Q3: Why is ASX increasing spending?

The company is upgrading technology systems, investing in AI, improving automation and addressing regulatory concerns.

Q4: What did ASIC say about ASX?

ASIC criticised ASX over project delays, cost overruns and governance failures tied to technology upgrades.

Q5: Is ASX still growing revenue?

Yes. ASX said revenue for the 10 months to April 30 rose 12.5% to A$1.03 billion.

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