NEWS of more job losses in the banking industry and a further round of Greek austerity measures did little to unsettle investors, with the market rising 1 per cent after Commonwealth Bank lifted its variable mortgage rate independently of the Reserve Bank.
All the ASX sector indices finished higher, except for property trusts, which were just in the red. The strongest performers were goldminers and the banks, with the latter benefiting from the effects of the Greek vote.
The S&P/ASX 200 Index rose 39.8 points, or 0.94 per cent, to 4285.1.
ANZ yesterday confirmed it would slash 1000 jobs this year in response to a changing environment for banks. Higher funding costs, lower consumer and business demand for financial services, and increasing global regulation were all worrying, the bank said.
The Finance Sector Union said it feared that more than 10,000 banking positions could be lost in the next
18 months.
Financial stocks rallied after CBA followed Westpac, ANZ and Bendigo Bank in raising its variable mortgage rate. Its 10-basis-point increase lifted its variable rate to 7.41 per cent.
CBA shares jumped 41?, or 0.8 per cent, to $50.29, ANZ rose 35?, or 1.6 per cent, to $21.77, and Westpac and NAB were both up 1.4 per cent.
A majority of the Greek parliament voted for another round of austerity measures to satisfy requirements for more emergency funding from European governments.
"There is no way to cloud the issue," said Stan Shamu from IG Markets.
"The belt-tightening measures imposed on Greece are brutal and come at time when the Greek economy needs to grow, so cutting 7 per cent of gross domestic product over the next three years is tough."
The big resource stocks finished strongly. BHP Billiton continued its climb, gaining 36?, or 1 per cent, to $36.66, while Rio Tinto rose 45? to $70.43, and Woodside Petroleum improved 18? to $35.58.
Australia's biggest gold producer, Newcrest Mining, climbed $1.09, or 3.2 per cent, to $35.10.
Construction company Leighton Holdings closed 47?, or 2 per cent, lower at $23.38, with an improved first-half profit overshadowed by an alleged case of improper payments by one of its subsidiaries in Iraq.
JB Hi-Fi lost early gains to finish up 4? at $12.03 after its net profit fell 9.4 per cent in the first half. Analysts said most of the bad news was already priced into its share price. JB reported improved February sales.
Frequently Asked Questions about this Article…
What drove the ASX market rise and how big was the gain?
The ASX rose after banks and goldminers led gains, and investors shrugged off news of more bank job losses and fresh Greek austerity measures. The S&P/ASX 200 Index climbed 39.8 points, or 0.94%, to 4285.1.
How did Commonwealth Bank’s variable mortgage rate hike affect bank shares?
Commonwealth Bank lifted its variable mortgage rate by 10 basis points to 7.41%, following moves by Westpac, ANZ and Bendigo Bank. Financial stocks rallied on the repricing: CBA shares rose to $50.29, ANZ increased to $21.77, and Westpac and NAB were both up as well.
What job cuts were announced in the banking sector and could more follow?
ANZ confirmed it will slash 1,000 jobs this year, citing higher funding costs, weaker demand for financial services and rising global regulation. The Finance Sector Union warned that more than 10,000 banking positions could be lost over the next 18 months.
Did the Greek austerity vote affect Australian markets?
Yes. A majority of the Greek parliament approved another round of austerity measures to secure emergency funding, and commentators noted the measures were severe. Despite that, Australian financial and resource stocks still rose, with investors appearing more focused on domestic banking moves.
Which ASX sectors performed best and worst on the day?
All ASX sector indices finished higher except property trusts, which were slightly in the red. The strongest performers were goldminers and banks.
How did major resource stocks move — what happened to BHP, Rio Tinto and Woodside?
Big resource stocks finished strongly: BHP Billiton rose to $36.66 (a gain described as 36 cents, or about 1%), Rio Tinto rose to $70.43, and Woodside Petroleum improved to $35.58.
What happened with Newcrest Mining and wider goldminer performance?
Australia’s biggest gold producer, Newcrest Mining, climbed $1.09, or 3.2%, to $35.10. Goldminers were among the day’s strongest sector performers.
Why did Leighton Holdings and JB Hi‑Fi move, and what should investors note?
Leighton Holdings fell about 47 cents, or 2%, to $23.38 despite an improved first-half profit, after an alleged improper payments case involving a subsidiary in Iraq weighed on sentiment. JB Hi‑Fi finished up about 4% at $12.03 after reporting a 9.4% fall in first-half net profit; analysts said much of that bad news appeared already priced into the stock, with improved February sales also reported.
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