Strong gains among financial and energy stocks have driven the share market higher after better news from Deutsche Bank lifts global risk appetite.
The benchmark S&P/ASX 200 was up 0.78 per cent at 5478.5 at Monday’s following reports that global lending giant Deutsche Bank’s huge US fine could be slashed.
Trading volumes were lower than usual as most states celebrated the Labor Day public holiday.
IG market analyst Angus Nicholson said Australian banking stocks followed their US and European counterparts to rally strongly on prospects that Deutsche Bank will face a lower settlement with US authorities than the previously flagged $US14 billion ($A18 billion) fine over mortgage securities.
“The Deutsche Bank situation has re-enlivened risk-on environment and because of that we have seen not only financials but also commodities do well with the materials and energy sector rallying,” he said.
“Some further gains in the oil price on Friday, the more upbeat outlook on oil prices and the general risk-on environment have driven gains in the energy stocks.”
Commonwealth Bank rose $1.10, or 1.52 per cent, to $73.50, Westpac gained 52 cents, or 1.76 per cent, higher at $30.03, ANZ lifted 31 cents, or 1.12 per cent, to $27.94, and National Australia Bank was up 21 cents, or 0.75 per cent, to $28.08.
As for the energy firms, Santos was up nine cents, or 2.49 per cent, at $3.70, Woodside Petroleum added 24 cents, or 0.84 per cent, to $28.86, Origin Energy gained 10 cents, or 1.85 per cent, to $5.52 and Oil Search climbed six cents, or 0.85 per cent, to $7.15.
The market is keenly waiting for the Reserve Bank of Australia’s interest rate decision and accompanying policy statement due on Tuesday.
KEY FACTS:
* At 1615 AEST, the benchmark S&P/ASX 200 index was up 42.6 points, or 0.78 per cent, at 5478.5,
* The broader All Ordinaries index was up 39.6 points, or 0.72 per cent, at 5,564.8 points.
* The December share price index futures contract was up 47 points at 5,463, with 25,035 contracts traded.
* National turnover was 1.5 billion securities traded, worth $2.5 billion.
