The Australian share market opened the session on a firmer footing, with the S&P/ASX 200 index recovering from Thursday's inflation-driven selloff. By mid-morning, the benchmark was trading 21.8 points higher at 9,060.00, a gain of 0.24%, as strength in technology and energy names helped counterbalance weakness among the major banks.
The rebound followed a positive lead from Wall Street, where Nvidia's rally lifted technology sentiment globally. Higher oil prices, with Brent crude climbing 1.9% overnight to US$89.52 per barrel, provided additional support to energy equities. However, the broader market's advance was tempered by lingering concerns over domestic inflation, which continued to weigh on rate-sensitive sectors such as banking.
Market Movements and Key Drivers
The ASX 200 opened at Thursday's close of 9,038.20 and quickly reached a high of 9,066.70 before pulling back to 9,052.00 by 10:15 AEST. It then recovered to 9,060.00 by 10:29, reflecting a modest but resilient upward bias. The All Ordinaries index also advanced, gaining 0.29% to 9,269.90.
Among the leaders, energy stocks outperformed, with Woodside Energy (WDS) rising 1.16% to A$32.37. Fortescue (FMG) added 0.96% to A$17.87, while BHP (BHP) edged up 0.26% to A$66.57. In contrast, Commonwealth Bank (CBA) slipped 0.21% to A$154.64, and Rio Tinto (RIO) fell 0.67% to A$177.51. Qantas (QAN) was also lower, down 0.36% to A$9.62.
NextDC Results Highlight AI Infrastructure Demand
In corporate news, NextDC (NXT) reported its FY26 results, showcasing strong growth driven by artificial intelligence infrastructure demand. The company posted revenue of A$405 million, up 16% year-on-year, while underlying EBITDA rose 15% to A$248.8 million. Contracted utilisation surged 202% to 740.1 megawatts, exceeding management's guidance. The results underscore the accelerating demand for data centre capacity, a key theme in the current technology investment cycle.
Inflation and Rate Outlook Remain in Focus
Investors continued to digest the latest inflation data, which showed headline CPI at 3.5% year-on-year in July, while the trimmed mean measure came in at 3.6%. These figures reinforce concerns that domestic inflation remains sticky, potentially limiting the Reserve Bank of Australia's ability to ease monetary policy in the near term. The firmer oil price adds to inflation risks, while the Australian dollar's strength at US$0.7195 creates a mixed outlook for corporate margins and the policy path.
The market's response has been selective: growth-oriented sectors like technology are benefiting from the Nvidia-led rally, while banks are lagging due to the heightened rate uncertainty. This divergence is a key feature of the current session.
Outlook and Key Watchpoints
Looking ahead, market participants are monitoring several events. At 10:30 AEST, Virgin Australia is scheduled to hold its FY26 briefing, with guidance and fuel commentary likely to influence transport stocks. The close of regular cash trading at 16:00 AEST will be followed by the closing single-price auction at 16:10, which will provide a clearer picture of institutional positioning.
Analysts note that the sustainability of the rebound depends on whether the advance broadens beyond technology and energy. With inflation risks still elevated, the market may remain range-bound in the near term, but the resilience of tech and energy names offers a positive counterbalance to banking sector headwinds.
