Cyprus deal clears air and our banks rise
Cyprus had until Monday to agree to the ECB's conditions in order to receive the €10 billion ($12.49 billion) deal.
At the close, the benchmark S&P/ASX 200 Index was up 22.9 points, or 0.46 per cent, at 4990.2. The broader All Ordinaries Index was up 20.7 points, or 0.42 per cent, at 5001.5.
IG Markets chief strategist Chris Weston said most local investors were optimistic that a deal would go ahead.
He said gains by the four major banks had driven the Australian market higher as investors continued their chase for high-yielding stocks.
"It was just about the banks, really," he said.
"When you see all four big banks over 1 per cent [higher], considering their weight on our market now, it drives it up."
ANZ closed 28¢ higher at $28.83, National Australia Bank was up 22¢ at $30.85, Westpac surged 51¢ to $31.01 and Commonwealth Bank jumped 37¢ to $69.
Leighton jumped 87¢ to $21.07 after it appointed director Bob Humphris as chairman.
Outgoing chairman Stephen Johns stepped down and left the company on Friday, along with directors Wayne Osborn and Ian Macfarlane, a former Reserve Bank governor, after a breakdown in relations with Leighton's major shareholder, Hochtief.
Westfield Group securities gained 18¢ to $10.94 after it said it would sell a 49.9 per cent stake in its six Florida shopping centres to O'Connor Capital Partners for $US700 million ($673.63 million).
Shares in toy distributor Funtastic closed flat at 23.5¢ after it announced a 68 per cent jump in first-half profit.
The dollar was higher after the Cyprus bailout deal.
At 5pm on Monday, it was trading at US104.55¢, up from Friday's close of US104.26¢.
CMC Markets chief market strategist Michael McCarthy said there had been a lot of cross-trading during the afternoon as the euro strengthened against the Aussie.
"We have weakened against the euro and that's what it appears to be about," Mr McCarthy said. "It's not that the US dollar has weakened against the euro, it's that the euro has strengthened."
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The market rose after Cyprus struck a last‑minute bailout deal with the European Central Bank, which eased investor worries. The S&P/ASX 200 closed up 22.9 points (0.46%) at 4,990.2 and the All Ordinaries gained 20.7 points (0.42%) to 5,001.5, with the big banks leading the advance.
The bailout deal reduced global risk concerns and kept local investors optimistic that a resolution would be reached. According to IG Markets chief strategist Chris Weston, that optimism helped drive buying — particularly in high‑yielding, heavily weighted bank stocks — pushing the market higher.
All four major banks strengthened and were a key market driver. At the close ANZ was up $0.28 to $28.83, National Australia Bank rose $0.22 to $30.85, Westpac surged $0.51 to $31.01 and Commonwealth Bank jumped $0.37 to $69.00.
Leighton jumped $0.87 to $21.07 after appointing director Bob Humphris as chairman. The move followed the departure of outgoing chairman Stephen Johns and two directors after a breakdown in relations with major shareholder Hochtief.
Westfield Group securities gained $0.18 to $10.94 after announcing it will sell a 49.9% stake in its six Florida shopping centres to O'Connor Capital Partners for US$700 million (about A$674 million), a deal investors reacted positively to.
Funtastic shares finished flat at 23.5 cents despite announcing a 68% jump in first‑half profit, meaning the positive profit surprise did not translate into higher share price on that trading day.
The Australian dollar strengthened slightly after the Cyprus deal, trading at US104.55 cents at 5pm, up from US104.26 cents on Friday. CMC Markets' Michael McCarthy noted there was a lot of cross‑trading as the euro strengthened against the Aussie — it was the euro's move more than a weaker US dollar that influenced flows.
The session shows how geopolitical or European bailout news can quickly boost risk appetite and lift locally heavy sectors like the big banks. The article highlights investors' ongoing search for high‑yielding stocks and how those preferences can amplify market moves when major components all rally.
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