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Aussie banks look set to rise interest rates

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Published on: Friday, October 15, 2010

As a bank-led interest rate rise looks more likely, Aussie shares continued to climb.

In trading, the All Ords put on 74.8 points, or 1.59 per cent, to 4765.9, and the ASX 200 jumped 79.2, or 1.71 per cent, to 4699.1.

By sector, energy rose by 285 points or 1.88 per cent, materials were up 340.1 points or 2.62 per cent, industrials gained 69.4 points or 1.86 per cent and financials put on 72.6 points or 1.67 per cent.

Healthcare was the only sector to lose traction, slipping 36.5 points or 0.45 per cent.

Among the top gainers were Kagara Ltd, adding 7.33 per cent to $0.80, St Barbara which put on 7.22 per cent to $0.44, and Lynos Corp, up 6.87 per cent to $1.71.

And among the losers, PaperlinX dropped 2.13 per cent to $0.46, Infigen Energy fell 2.24 per cent to $0.66, and Macquarie Atlas Roads Group shed 2.45 per cent to $1.40.

In news, Australian banks look set to rise interest rates beyond the Reserve Bank’s official cash rate.

“I think there's no doubt that when we look at current funding costs, rates are going to increase,” the Commonwealth Bank of Australia’s Ralph Norris told a Committee for Economic Development of Australia function today in Sydney.

Norris’ comments follow Westpac chief executive Gail Kelly’s comments on Monday that interest rates would rise “over time” thanks to materially higher funding costs.

The Aussie dollar was buying US99.6 cents and 70.75 Euro cents, and the Nikkei was last at 9574.4, up 1.82 per cent, and the Hang Seng at 23704.7, up 1.05 per cent.

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