The Australian share market has closed higher as investors rotate from the mining sector into the big banks as expectations of interest rate hikes strengthen.
The benchmark S&P/ASX200 index ended the day up 25.6 points, or 0.45 per cent at 5,720.6 points.
IG chief market analyst Chris Weston said investors were shifting from the mining sector into the financial sector.
He said banking stocks were doing well in Australia and in overseas markets as bond yields moved up amid heightened expectations of interest rate hikes, especially in the US, UK and Europe.
“The banks have benefited from that sort of global bank reflation trade that’s been happening there,” Mr Weston said.
Mr Weston said investors are awaiting the next meeting of the US Federal Reserve later this week for commentary on the timing of the next interest rate hike.
On the local bourse, among the big four banks Westpac added 0.7 per cent to $31.67, National Australia Bank gained 1.1 per cent to $31.20, and Commonwealth Bank lifted 0.5 per cent to $76.69.
ANZ was up one per cent at $30.18.
ANZ on Monday responded to media reports that it had received two overseas offers to buy its wealth business – one of those offers above $4 billion – to say only that talks on the future of the business were ongoing.
The major miners were mixed following another fall in the price of iron ore, which has dropped $US2, to around $US70.
Global miner BHP Billiton inched up 0.1 per cent to $26.28, Rio Tinto eased 0.2 per cent to $66.67, and Fortescue Metals dropped 2.7 per cent to $5.40.
Gold miner Evolution Mining, which has agreed to sell its Edna May gold mine in Western Australia to Ramelius Resources for up to $90 million, was down 0.4 per cent at $2.40.
Energy stocks also lifted on the back of well-supported oil prices.
Woodside Petroleum rose 0.4 per cent to $28.52, Oil Search improved 1.8 per cent to $6.92, and Santos found 1.5 per cent at $3.97.
Meanwhile, the Australian dollar has benefited from a weaker US dollar on the back of a mixed bag of economic data, and was trading at 80.24 US cents at 1630 AEST, up from 79.96 US cents on Friday.
ON THE ASX:
* The benchmark S&P/ASX200 closed up 25.6 points, or 0.45 per cent, at 5,720.6 points.
* The broader All Ordinaries index closed up 23.2 points, or 0.4 per cent, at 5,779 points.
* The September SPI200 futures contract was up 28 points, or 0.49 per cent, at 5,720 points.
* National turnover was 2.8 billion securities traded worth $4.9 billion.
CURRENCY SNAPSHOT AT 1700 AEST:
One Australian dollar buys:
* 80.18 US cents, from 79.96 on Friday
* 89.313 Japanese yen, from 88.49 yen
* 67.12 euro cents, from 67.06 euro cents
* 59.02 British pence, from 59.51 pence
* 109.7 NZ cents, from 110.38 cents
GOLD:
The spot price of gold in Sydney at 1700 AEST was $US1,315.12 per fine ounce, from $US1,329.75 per fine ounce on Friday.
BOND SNAPSHOT AT 1630 AEST:
* CGS 4.50 per cent April 2020, 2.0488pct, from 2.0015pct
* CGS 4.75pct April 2027, 2.7488pct, from 2.6909pct
Sydney Futures Exchange prices:
* December 2017 10-year bond futures contract at 97.17 (implying a yield of 2.83pct), from 97.225 (2.775pct) on Friday
* December 2017 3-year bond futures contract at 97.81 (2.19pct), from 97.855 (2.145pct).
