AU Evening Wrap | ASX 200 Rebounds 0.4% as Banks, Property Trusts, and Tech Stocks Gain

Shares in Australian data-center operator NextDC soared up to 13% after Blackstone announced its $16 billion acquisition of rival AirTrunk. This marks Blackstone's largest deal in the Asia-Pacific region. NextDC's stock, which recently gained 9.0% to AU$17.52, experienced its biggest one-day gain since March 2020. The surge is attributed to significant activity in the data-center sector and its inclusion in Nareit's latest review. The growth in AI and cloud computing has made data centers highly valuable, with NextDC being the third-largest tech stock on Australia's S&P/ASX 200 index.

Ilya Sutskever, co-founder of OpenAI, has launched a new company, Safe Superintelligence (SSI), which has raised $1 billion from investors including Andreessen Horowitz, Sequoia Capital, DST Global, and SV Angel. SSI, founded in June after Sutskever left OpenAI, focuses on developing "safe" AI models. The startup also received support from NFDG, a venture capital firm co-founded by Nat Friedman and Daniel Gross. With offices in Palo Alto and Tel Aviv, SSI aims to build a small team of top technical talent to tackle what it calls "the most important technical problem of our time."

Shares pulled back from earlier highs after Reserve Bank Governor Michele Bullock warned that more economic restrictions might be necessary if inflation doesn't decrease. Speaking in Sydney, Bullock emphasized that high inflation harms everyone, particularly the most vulnerable, and advocated for using interest rates to control it. Goldman Sachs economist Andrew Boak noted that Bullock's comments contrast with market expectations of an 80% chance of a rate cut by the end of 2024. Banking stocks, which had earlier gains, closed 0.7% higher.

Oil and gas giant Woodside was the largest drag on the index, plunging 6.2% to $25.35 after Citi analysts downgraded the stock to sell as it traded without the right to its next dividend. This marked Woodside’s worst one-day drop since August 2023. Additionally, a further decline in oil prices, with Brent crude falling below $73 a barrel—a 14-month low—also negatively impacted the wider energy sector. Brent has dropped nearly 8% since the start of the week.