The Australian sharemarket oscillated through Wednesday’s session before ending in positive territory, with the S&P/ASX 200 climbing 14.4 points to close at 8831.30. Eight of the index’s 11 sectors finished higher, but the session was dominated by a brutal sell‑off in the data centre sector.
Data centre operator NextDC plunged 41.7 per cent, dragging sentiment across related property names and weighing on the market at large. The company warned that delays to its contentious M3 expansion in Melbourne, amid local opposition to power‑grid upgrades, noise and visual impacts, have forced it to cut sales and profit forecasts and consider “capital recycling” including selling development sites.
The broader market’s gyrations followed hawkish comments from Reserve Bank deputy governor Andrew Hauser, who said the nation’s inflation outlook looked “materially worse” than the bank assumed in August because oil and technology costs have surprised to the upside.
“We’re seeing higher AI prices, tech prices feeding through into CPI,” Hauser said, highlighting persistent domestic price pressures and noting oil is now about a third higher than the RBA had assumed.
Traders reacted quickly: swaps data compiled by Bloomberg showed the market moved to price roughly a 43 per cent chance of a rate rise at the RBA’s policy meeting on November 3, up from about 30 per cent prior to Hauser’s remarks. A 25 basis‑point hike in February is now widely regarded as likely, having been brought forward from earlier expectations for May.
Market strategists said Hauser’s tone was deliberately stern. Sean Callow, senior analyst at ITC Markets in Sydney, said the deputy governor “sounds very uncomfortable about how [third‑quarter] inflation is shaping up,” suggesting the remarks may be intended to warn investors about the prospect of additional tightening.
The financial sector provided the main support for the index, with all of the Big Four banks finishing higher. Commonwealth Bank rose 0.9 per cent, National Australia Bank recovered 1.9 per cent, Westpac added 1.1 per cent and ANZ increased 0.6 per cent. The resilience in banks helped cap overall losses despite weakness elsewhere.
Miners were under pressure after BHP said its copper output had fallen by almost 20 per cent in the quarter because of adverse weather and lower ore grades at key Chilean operations. BHP slid 1.6 per cent and Rio Tinto lost 1.5 per cent, while gold producers Evolution and Newmont dropped 1.6 per cent and 1.9 per cent respectively; takeover‑target Northern Star rose 1.8 per cent on a trading update.
Technology names showed mixed outcomes: NextDC’s rout overshadowed gains among software and cloud players that tracked stronger US futures after upbeat AI‑related results. Xero climbed 5 per cent, Megaport and WiseTech rose about 5 per cent and 2.9 per cent respectively, while Telstra added 1.9 per cent. Energy stocks were modestly higher as Brent crude traded above US$110 a barrel, with Woodside and Santos edging up 0.4 and 0.5 per cent.
Biotech giant CSL slipped 0.1 per cent during the session but announced after the close that Deborah Waterhouse, CEO of ViiV Healthcare, will take the reins as chief executive next February. Gordon Naylor will remain interim CEO until Waterhouse starts and will continue to run the company from the existing base while the incoming chief will be UK‑based.
The Australian dollar strengthened to about US70.15¢, reflecting both the local market’s reaction to RBA comments and firmer global sentiment. Overseas, US futures pointed to modest gains for Wall Street’s major indices after some big US tech and AI‑infrastructure names posted stronger‑than‑expected results, a factor that helped support local tech stocks despite the NextDC shock.
For investors and households the immediate implications are clear: higher oil and technology costs are feeding through to consumer prices and have pushed rate‑rise chances forward, increasing the risk of tighter borrowing conditions sooner than previously expected. Market attention will now focus on the RBA’s November meeting and the next round of corporate earnings for further clues on whether inflation pressures persist and how quickly policy may move.
