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Market buoyed by big four banks

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Published on: Wednesday, February 15, 2017

Strong investor demand for financial stocks, thanks to Commonwealth Bank's record first-half profit, has pushed the share market to its highest level since mid-2015.

The benchmark S&P/ASX200 index rose 0.94 per cent to 5,809.1 points, due mainly to a 1.7 per cent rally in the financials index.

Patersons Securities economist Tony Farnham said CBA's strong financial results and further gains in US financial stocks triggered by renewed expectations of interest rate increases drove that strength.

"They were already on the front foot at any rate after overnight trading, with the financials in the US going up as people started talking rate increases again," Mr Farnham said.

Commonwealth Bank jumped 2.3 per cent to $84.53 as growth in home lending and fees contributed to a two per cent rise in half year cash profit to $4.9 billion.

"Hard to fault the CBA result," Mr Farnham said.

National Australia Bank gained 2.4 per cent, Westpac added 1.8 per cent and ANZ was 1.3 per cent stronger.

Retail, health care resources stocks also found support on a busy earnings day.

Coles owner Wesfarmers gained 2.9 per cent to $43.33 after a 13 per cent rise in half year net profit, thanks to a strong performance at Bunnings, Kmart and Officeworks. The group also flagged the possible spin-off of Officeworks.

Blood products and vaccines supplier CSL rose 2.9 per cent to $118.00 after meeting expectations with a 12 per cent improvement in half year net profit.

Miners including BHP Billiton and Fortescue Metals continued to find support as iron ore prices hover above $US91 a tonne.

The Australian dollar fell in overnight trade but recovered that ground during the local session to be trading at 76.68 US cents at 1700 AEDT.

ON THE ASX:

* The benchmark S&P/ASX200 gained 53.9 points, or 0.94 per cent, to 5,809.1 points.

* The broader All Ordinaries index added 48.2 points, or 0.83 per cent, to 5,859.1 points.

* The March SPI 200 futures contract was up 57 points at 5,759 points, with 32,869 contracts traded.

* National turnover was 4.7 billion securities worth $6.8 billion.

CURRENCY UPDATE AT 1700 AEDT:

One Australian dollar buys:

* 76.68 US cents, from 76.74 US cents at Tuesday's close.

* 87.75 Japanese yen, from 86.98 yen

* 72.49 euro cents, from 72.27 euro cents

* 61.15 British pence, from 61.18 pence

* 106.89 New Zealand cents, from 106.72 NZ cents

GOLD:

The spot price of gold in Sydney at 1700 AEDT was $US1,224.90 per fine ounce, down $US4.70 from $US1,229.60 on Tuesday.

BOND SNAPSHOT AT 1630 AEDT:

* CGS 5.25 per cent March 2019, 1.86pct, up from 1.831pct

* CGS 4.25pct April 2026, 2.728pct, up from 2.683pct

Sydney Futures Exchange prices:

* March 2017 10-year bond futures contract at 97.18 (implying a yield of 2.82pct), down from 97.23 (2.77pct) on Tuesday

* March 2017 3-year bond futures contract at 97.95 (2.05pct), down from 98.01 (1.99pct).

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


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