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Resurgent banks boost share market

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The share market overcame a weak start to close higher as investors regained enthusiasm for the big banks.

The market dropped as much as 0.3 per cent in early trade, but gains in the financial sector lifted it into positive territory by late morning, and that momentum continued, taking shares 0.6 per cent higher.

Earnings updates from National Australia Bank and Bendigo and Adelaide Bank on Monday indicated better profit growth than what was reported by ANZ last week, CMC Markets chief market strategist Michael McCarthy said.

“Analysts are now thinking that the problems that ANZ have with profit growth are specific to ANZ rather than a symptom of a wider problem with the banking industry,” he said.

“Given the swinging sell-off that we saw on Friday, it’s quite natural now that we’re seeing some of those losses reversed.”

National Australia Bank added 50 cents to $33.32 as its quarterly cash profit rose nine per cent to $1.75 billion.

Commonwealth Bank advanced 84 cents to $82.14 despite expectations of a capital raising ahead, Westpac gained 33 cents to $32.68 and ANZ climbed 46 cents to $30.60.

Bendigo and Adelaide Bank dropped 34 cents to $12.63 despite a 13 per cent rise in annual cash profit to $432 million.

In the resources sector, BHP Billiton added seven cents to $26.00, Rio Tinto gained 47 cents to $53.74 and Fortescue Metals was four cents higher at $1.915.

JB Hi-Fi impressed with six per cent profit growth and forecasts of further improvement, sending its shares up $2.08, or 10.6 per cent, to $21.69.

Condoms and protective gloves maker Ansell plunged $3.91, or 15.8 per cent, to $20.84 after forecasting a drop in earnings in the current financial year.

KEY FACTS

* At 1620 AEST, the benchmark S&P/ASX200 index was up 34.4 points, or 0.63 per cent, at 5,509.2 points.

* The broader All Ordinaries index was up 32.6 points, or 0.6 per cent, at 5,504.9 points.

* The September share price index futures contract was up 38 points at 5,543 points, with 29,792 contracts traded.

* National turnover was 1.28 billion securities worth $3.83 billion.