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Big four banks lift Aust share market

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Published on: Friday, March 17, 2017

The major banks have driven the Australian share market higher after two of the big four increased their variable mortgage rates for investors and owner occupiers.

The benchmark S&P/ASX200 finished 0.24 per cent higher at 5,799.6 points.

Patersons Securities economist Tony Farnham said the financial sector, in particular the big four banks, have bounced from Thursday’s falls.

“There was a bit of value to be found today after the big four banks had a selldown on Thursday,” Mr Farnham said.

“The major story driving them higher is that the National Australia Bank and Westpac have both increased their variable interest rates and it is inevitable that the other two will do the same.”

He said the banks were lifting rates in anticipation their borrowing costs from overseas will increase further after the US Federal Reserve hiked its cash rate by 0.25 percentage points on Thursday, Australian time.

Westpac’s owner-occupier rate will rise by 0.03 percentage points to 5.32 per cent from March 24, and by 0.08 percentage points to 5.49 per cent for interest-only loans.

NAB will hike its owner-occupier rate by 0.07 percentage points to 5.32 per cent on March 24, and its investors rate will rise 0.25 percentage points to 5.8 per cent.

Shares in Westpac picked up 38 cents, to $34.65, NAB gained 17 cents, to $32.12, Commonwealth Bank lifted 23 cents to $84.77 and ANZ was up five cents at $31.58.

The energy sector was mixed with global oil prices hardly moving overnight.

Santos shed one cent to $3.73 and Oil Search fell two cents to $6.90, while Woodside Petroleum was up 18 cents at $31.54.

The major miners were mixed with BHP Billiton down 28 cents, or 1.1 per cent, to $24.84, while Rio Tinto was up 70 cents, or 1.1 per cent, to $62.93.

Shares in Slater and Gordon jumped by 4.1 cents – a 46 per cent gain – to 13 cents after the troubled law firm announced it has new creditors who plan to restructure the company under a debt for equity arrangement.

Myer gained 5.5 cents, or 5.1 per cent, to $1.135 after suffering a sell-off on Thursday following disappointing half year sales figures.

The Australian dollar was sitting at $76.86 US cents, compared to 76.89 US cents at Thursday’s close, following initial gains in the wake of the US Federal Reserve’s interest rate rise and policy statement.

ON THE ASX:

* At the close, the benchmark S&P/ASX200 was up 13.8 points, or 0.24 per cent, at 5,799.6 points

* The broader All Ordinaries index was up 12.7 points, or 0.22 per cent, at 5,840.2 points.

* The March SPI200 futures contract was up two points, or 0.03 per cent, at 5,787 points

* National turnover was 3.4 billion securities traded worth $8.4 billion.

CURRENCY SNAPSHOT AT 1700 AEDT:

One Australian dollar buys:

* 76.82 US cents, down from 76.89 US cents on Thursday

* 87.09 Japanese yen, down from 87.11 yen

* 71.32 euro cents, down from 71.68 euro cents

* 62.18 British pence, down from 62.68 pence

* 109.91 New Zealand cents, down from 109.94 NZ cents

GOLD:

The spot price of gold in Sydney at 1700 AEDT was $US1,226.90 per fine ounce, up 80 US cents from $US1,226.10 on Thursday.

BOND SNAPSHOT AT 1630 AEDT:

* CGS 5.25 per cent March 2019, 1.8256 pct, from 1.8166pct

* CGS 4.25pct April 2026, 2.803 pct, from 2.758pct

Sydney Futures Exchange prices:

* June 2017 10-year bond futures contract at 97.095 (implying a yield of 2.905pct), from 97.14 (2.86pct) at Thursday’s close

* June 2017 3-year bond futures contract at 97.92 (2.08pct), from 97.93 (2.07pct)

(*Currency closes taken at 1700 AEDT previous local session, bond market closes taken at 1630 AEDT previous local session)


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