Australian shares rose on Wednesday after National Australia Bank hit a record high, while New Zealand equities advanced after the central bank held rates and signalled policy would remain accommodative.
The S&P/ASX 200 gained 0.5% to close at 9,007 points, reclaiming the 9,000 level for the first time since last Wednesday and extending gains to a third straight session.
Despite strong earnings, investors remained cautious about how banks would fare once the Reserve Bank of Australia begins raising rates, a move that could pressure asset quality and curb credit demand. Down south, in a widely expected move, New Zealand’s central bank held rates steady at 2.25%, saying it was confident inflation would return to its target band.
The benchmark S&P/NZX 50 index gained 1.7% to 13,247.02 points, logging their best day in over 9 months. In Syndey, Financials, up 0.6%, have climbed in the past two weeks on the back of robust earnings from all four major banks, with National Australia Bank’s rising as much as 5.8% to a record high after reporting a 16% growth in its first-quarter cash earnings.
While major lenders remain high-quality and effectively “too big to fail”, much of their risk is clustered in housing and domestic economy growth, Hayden Beamish, CIO at Endeavor Asset Management said. Insurer Suncorp fell 4.4% to close at its lowest in a year after reporting a worse-than-expected slide in first-half earnings, to cap some of the sector’s gains.
Miners eased 0.1%, with BHP slipping 0.9% after its record high in the previous session, a bout of profit-taking, as per Beamish. While rivals Rio Tinto and Fortescue firmed 1.3% and 0.5%, respectively. BlueScope Steel advanced 2.6% to log their best day in a month after revealing it was weighing an improved A$15 billion ($10.60 billion) takeover proposal from SGH and U.S’s Steel Dynamics. Oil producer Santos slipped 0.6% on posting a sharper-than-expected drop in annual profit.
($1 = 1.4150 Australian dollars).
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