Westpac joins $100b club as market rises
The benchmark S&P/ASX 200 jumped 86.2 points, or 1.7 per cent, to 5102.4, its biggest one-day gain in more than a month as investors bet that lower than expected inflation data would trigger another rate cut by the Reserve Bank. The broader All Ordinaries added 81.6 points, or 1.6 per cent, to 5084.2.
The financial sector was the biggest driver, surging 2.1 per cent, as investors chased higher-yielding stocks. Westpac is just the third company after BHP Billiton and CBA to be worth more than $100 billion, with its market capitalisation reaching $100.9 billion after the day's rally.
Westpac shares pushed up 2.5 per cent to $32.50, a record high. Commonwealth Bank shares also hit a record high, jumping 2.4 per cent to $71.70, which took the bank's market capitalisation to $115 billion. Discounting BHP's London shares, CBA is the biggest stock on the local market.
ANZ and NAB also had strong gains, rising 2.2 per cent to $29.90 and 2.2 per cent to $32.76 respectively. "It's all about yield. Look at the big four banks, Telstra, all up, really strongly," said RBS Morgans senior trader Luke McElwaine.
Telstra shares added 0.8 per cent to finish at $4.88, their highest point since February 2008.
The Nikkei closed 2.3 per cent higher and China's benchmark CSI300 rose as much as 2.5 per cent.
There were no flow-on effects from a mini-crash on Tuesday in the US. The sudden drop was sparked by a fake tweet that was sent out under Associated Press' account, which said there had been explosions at the White House. US stocks plunged about 1 per cent, before recovering on news it was a fake tweet.
Local shares also enjoyed a boost from inflation figures that came in lower than expected. Inflation increased 0.4 per cent quarter-on-quarter and 2.5 per cent year-on-year.
The Australian dollar continued to trade a little above a six-week low of $US1.0221, reached on Tuesday.
Frequently Asked Questions about this Article…
Westpac's share price rose during a broad-based market rally, pushing its market capitalisation to about $100.9 billion. That gain made Westpac the third local company, after BHP Billiton and Commonwealth Bank (CBA), to top the $100 billion mark.
The S&P/ASX 200 jumped 86.2 points (1.7%) to 5,102.4 — its biggest one-day gain in more than a month — as investors reacted to lower-than-expected inflation data and bet that the Reserve Bank might cut rates. The financial sector led the rally as investors chased higher-yielding stocks.
Big four banks had strong gains: Westpac rose 2.5% to $32.50 (a record high), Commonwealth Bank jumped 2.4% to $71.70 (taking its market cap to about $115 billion), while ANZ and NAB each gained 2.2% to finish at $29.90 and $32.76 respectively.
Investors were chasing yield, which helped lift bank and telco stocks. As RBS Morgans senior trader Luke McElwaine noted, the big four banks and Telstra were all up, reflecting a market preference for higher-yielding shares.
Telstra shares added 0.8% to finish at $4.88, marking their highest price since February 2008 — a notable recovery for a major high-yield stock amid the broader rally.
Yes — Japan’s Nikkei closed 2.3% higher and China’s CSI300 rose as much as 2.5%, providing positive regional momentum. A separate US mini‑crash triggered by a fake Associated Press tweet briefly hit US stocks but had no flow-on effects for local markets.
Australian inflation rose 0.4% quarter-on-quarter and 2.5% year-on-year, which was lower than expected. Those softer inflation readings boosted local shares as investors increased bets that the Reserve Bank could cut rates in the future.
The Australian dollar traded a little above a six-week low of US$1.0221 (the low reached on Tuesday), remaining relatively weak even as local equities rallied.
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