Australian Banks Keep Rising and Push ASX Higher

Australian Banks Keep Rising and Push ASX Higher
Australian Securities Exchange, operated by ASX Ltd. on March 16, 2020 in Sydney, Australia

Australia's big four banks are enjoying another surge in early trade on the ASX, and the main indices are more than 1.5 percent higher.

The S&P/ASX200 benchmark index was up by 100.4 points, or 1.74 percent, at 5875.4 points after the first 30 minutes of trade on May 28.

The All Ordinaries index was 99.8 points, or 1.70 percent higher, at 5984.7.

Investors have pushed the financials sector 3.57 percent higher and ANZ had the greatest gain of the big four—5.8 percent—to $18.98.

NAB leapt 4.91 percent to $18.82, Commonwealth Bank was up 2.78 percent to $66.09 and Westpac was higher by 3.98 percent to $18.31.

Macquarie Bank rose 3.15 percent to $114.44.

The enthusiasm for banks follows a UBS report on Wednesday that said banks would be major beneficiaries from the reopening of the world economy.

Meanwhile, Bendigo and Adelaide Bank has outlined a provision of $148.3 million for potential future impacts on account of the COVID-19 pandemic.

The regional bank says the extra charge to its accounts is based on a significant change to the economic outlook including lower GDP, higher unemployment and a reduction in residential and commercial property prices.

The news did not deter investors, who sent the share price up 6.2 percent to $6.68.

All sectors were higher except for property. After financials, the best performer was materials, higher by 1.8 percent.

BHP gained 1.83 percent to $35.09, Rio climbed 1.4 percent to $92.80 and Fortescue rose 2.68 per cent to $13.43.

The energy sector was barely positive, up 0.05 percent.

Giants Santos, Woodside and Oil Search were down by less than 1.0 percent.

Origin was a bright spot, up 1.72 percent to $5.93.

In industrials, shares in surveyor specialist Veris jumped 37.93 percent to 4.0 cents.

Veris said subsidiary Aqura Technologies had won contracts with BHP, Oz Minerals and US-based Cubic Corporation worth $4.3 million.

Meanwhile, businesses' capital spending data from the first quarter of the year will be published on Thursday.

ANZ economists expect a drop of 3.3 percent on the previous quarter.

Bank stocks also did well in the US overnight. The S&P 500 financial index led gains among major sectors.

US investors were buoyed by the continued easing of lockdowns.

The Dow Jones Industrial Average rose 553.16 points, or 2.21 percent, to 25,548.27, the S&P 500 gained 44.36 points, or 1.48 percent, to 3,036.13, and the Nasdaq Composite added 72.14 points, or 0.77 percent, to 9,412.36.

One Australian dollar was buying 66.23 US cents at 1030 AEST, down from 66.44 US cents at the close of trade on Wednesday.

Steven Deare