Bumper results from Westpac and ANZ buoyed shares, writes Gareth Hutchens.
The sharemarket jumped above the 5100 level this week, hitting a high for the year on Tuesday when ANZ bank announced a 10 per cent jump in half-year earnings to $3.18 billion.
Shareholders cheered after the bank vowed to deliver a bigger slice of future profits, and its share price responded by jumping to a new high.
Much of the news was bank-related this week. On Friday Westpac announced a 10 per cent boost in half-year profits to $3.53 billion, and a fully franked dividend of 86¢ a share, up 4¢ on the same period last year.
The sharemarket closed flat for the day on Friday as investors reaped profits from booming bank stocks.
For the week, the broader benchmark S&P/ASX200 gained 32 points, or 0.6 per cent, at 5129.5, while the broader All Ordinaries rose 22.7 points, or 0.4 per cent, at 5105.4.
The miners were out of favour this week, compared to the banks.
"Resources are cheap, disliked, under-owned and going to surprise everyone over the next few months with their 'unexpected rallies'," Goldman Sachs institutional trader Richard Coppleson wrote.
"Most don't believe this will happen, the crowd are staying away from resources and that is why they'll do well.
But he also noted that this didn't stop investors rotating out of banks and into mining stocks on Friday. "BHP and Rio were both better as a little bit of switching between the banks & resources took place."
On Friday, the Australian dollar was trading at US102.54¢, up from US102.36¢ the day before, after the European Central Bank cut its refinancing rate to a record low of 0.5 per cent. It also came after stronger US unemployment and trade data.
For the week, ANZ rose $1.72, or 5.8 per cent, at $31.60, after lifting its dividend and posting a $3 billion-plus half-year profit.
Westpac rose 98¢, or 3 per cent, at $33.55, after it lifted its first-half profit by 10 per cent said it would pursue growth opportunities such as deposits.
ASX gained 74¢, or 1.99 per cent, at $37.84. Greater activity on the sharemarket in the March quarter helped to lift the profit of the stock exchange by nearly 2 per cent in the first nine months of the financial year.
Macquarie Group soared $5.13, or 13.5 per cent, at $43.11, after the investment bank announced a 17 per cent rise in full-year profit.
Myer slumped 18¢, or 5.9 per cent, to $2.99. The retailer has been told to lift disability employment rates after chief executive Bernie Brookes weathered a storm of criticism for suggesting a plan to help millions of disabled Australians would damage profits.
Telstra rose 17¢, or 3.46 per cent, at $5.09. The telco maintained its full-year earnings guidance and is aiming to lift dividends over time.
Whitehaven Coal fell 10.5¢, or 5.4 per cent, at $1.84, after it said it was looking to find more cost savings as the miner battles weak coal prices and a high dollar.
Sydney Airport rose 2¢, to $3.49, despite its service levels falling across its Australian airports, and after Sydney Airport was called the busiest and worst performing, according to the consumer watchdog.