The Point

Rajinder Singh: What’s driving Aussie equities this week?

Elise McKay: How equities investors should think about China’s disruptive DeepSeek AI

Market volatility sparked by China’s surprise DeepSeek AI app underscores the benefits of taking an active approach to portfolio management, argues Pendal’s Elise McKay.

DeepSeek rocked the tech world last week by demonstrating performance similar to OpenAI’s ChatGPT at a fraction of the development cost.

Market reaction was swift. Nvidia, the leading supplier of AI chips, dropped 17 per cent.

“The day-one market reaction is not necessarily reflective of the medium-or-longer-term outlook,” says Elise. “It is important to look through the noise.

“Volatility is a reflection of the unknown — and uncertain situations can create opportunities as we get clarity.

“DeepSeek demonstrates how the increasing influence of passive money in equity markets is creating opportunities for active managers.

“Cheaper AI shifts power away from the handful of hyper-scalers who could previously charge a premium for access. Open-source models mean a wider range of people can use it.”

“That could mean a broadening of market leadership away from the Magnificent Seven tech leaders such as Nvidia and Meta.”

Pendal’s Rachel Folder on the 2025 outlook for Aussie equities

Pendal investment analyst RACHEL FOLDER joins Livewire Markets to reveal her picks and predictions for the year ahead

What’s driving ASX stocks this week?

ASX outlook: What’s driving Aussie equities this week

Crispin Murray: What’s driving the ASX this week?