ANZ leads surge to a new five-year high
The benchmark S&P/ASX 200 Index was up 65.4 points, or 1.28 per cent, on Tuesday at 5191.2, matching June 2008. The broader All Ordinaries Index was up 60.3 points, or 1.18 per cent, at 5168.6.
RBS Morgans Brisbane senior client adviser Bill Chatterton said ANZ's 11 per cent increase in its interim dividend was rewarded by investors as its shares soared a record $1.74 to $31.84.
"The market has been searching for yield for some time now, so for a core yield company like ANZ to come out and improve their dividend, it was really what the market wanted to listen to," he said.
ANZ's result pushed up other financial stocks. National Australia Bank surged 92¢ to $34, Commonwealth Bank jumped $1.85 to $73.45, Westpac gained 68¢ to $33.80 and Macquarie Bank added $1.32 to $33.80.
Other high-yielding stocks also performed well. Telstra jumped 5¢ to $4.98 and Qantas also gained 5¢ to $1.90.
Even mining stocks had a positive day, after recent drops.
BHP Billiton closed up 16¢ at $32.70 and Rio Tinto gained 44¢ to $55.80.
Origin Energy managed to close 3¢ higher at $12.32 despite extreme wet weather in Queensland contributing to a fall in quarterly revenue and in production from its oil and gas fields.
However, Whitehaven Coal fell 1¢ to $1.95 after the miner said it was looking to find more cost savings.
The price of gold in Sydney was $US1465.50 an ounce, down $US5 on Monday's close.
The bond market also closed firmer, with a strong rally during the local session overcoming some weakness offshore on Monday.
The June 10-year bond futures contract was trading at 96.91 (implying a yield of 3.09 per cent), up from Monday's local close of 96.9 (3.1 per cent). The three-year contract was at 97.45 (2.55 per cent), up from 97.44 (2.56 per cent) previously.
Bond prices opened weaker after moving in line with a selloff on US Treasuries in overnight trading, but recovered in local trading.
ANZ head of interest rate research Tony Morriss said investors continued to find local bonds an attractive investment.
Frequently Asked Questions about this Article…
The ASX reached a five-year high largely because ANZ reported a strong half-year profit (more than $3 billion) and lifted its interim dividend, which pushed ANZ shares to record levels. That jump in ANZ helped lift the benchmark S&P/ASX 200 (up 65.4 points to 5191.2) and the broader All Ordinaries Index on the day.
ANZ’s result and an 11% increase in its interim dividend boosted investor appetite for financial stocks. ANZ shares rose $1.74 to $31.84, and other major banks also gained: National Australia Bank up $0.92 to $34.00, Commonwealth Bank up $1.85 to $73.45, Westpac up $0.68 to $33.80 and Macquarie Bank added $1.32 to $33.80.
ANZ’s 11% interim dividend increase was seen positively because the market has been searching for yield. For income-focused investors, a higher dividend from a core yield company like ANZ can be appealing, but it’s important to consider overall company fundamentals and not rely solely on a single dividend announcement.
High-yielding stocks also had a good session: Telstra rose $0.05 to $4.98 and Qantas gained $0.05 to $1.90. The broader demand for yield helped support these income-oriented shares.
Mining stocks had a positive day despite recent weakness. BHP Billiton closed up $0.16 at $32.70 and Rio Tinto gained $0.44 to $55.80, showing a rebound in the sector during that trading session.
Origin Energy reported a fall in quarterly revenue and reduced oil and gas production due to extreme wet weather in Queensland. Despite that, Origin’s share price managed to close $0.03 higher at $12.32 on the day.
Whitehaven Coal fell $0.01 to $1.95 after the miner announced it was looking to find more cost savings. The market reacted to that update with a small share price decline.
The Sydney gold price was US$1,465.50 an ounce, down US$5 from the previous close. In bonds, the June 10‑year bond futures contract traded at 96.91 (implying a yield of about 3.09%), up slightly from the prior local close, and the three‑year contract was at 97.45 (around 2.55%). Local bond prices rallied during the session after some offshore weakness, and ANZ’s interest rate research head noted local bonds remained an attractive investment.
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