The share market is close to a two-year high after demand for the big four banks, energy producers and miners drove a second straight day of strong gains.
The benchmark S&P/ASX200 rose 0.9 per cent to close at its highest level since April 28, 2015, following a gain of 1.3 per cent on Tuesday.
Shaw and Partners senior private client adviser Craig Sidney said the big four banks accounted for just over one third of the market’s gains, as analysts upgraded their earnings forecasts following out of cycle interest rate hikes to offset rising funding costs.
“We’ve seen over the last few weeks all of the major banks have been increasing their interest rates for owner-occupier loans and investor loans as well, in varying degrees,” he said.
The biggest rate move came from Westpac, which increased rates on its superannuation fixed interest loans by 1.17 per cent, which is expected to lift earnings, Mr Sidney said.
Westpac shares rose 1.3 per cent, and its rivals gains were closer to one per cent.
The energy sector, led by Woodside Petroleum and Caltex Australia, was boosted by a rise in oil prices rose of more than one per cent following a disruption to Libyan supplies.
Origin Energy also found support, gaining 2.2 per cent after signing two agreements to supply gas for French energy major Engie’s operations in South Australia.
BHP Billiton and Rio Tinto gained ground as the price of iron ore rose about 1.5 per cent in Asian trading, and oil prices continued to improve, Mr Sidney said.
Ramsay Health Care, Cochlear and CSL pushed the health care sector up 1.1 per cent.
Bucking the broader market was Thorn Group, which dropped 11.7 per cent after a class action was filed against one of its companies, Radio Rentals, for alleged deception of customers.
ON THE ASX:
* The benchmark S&P/ASX200 gained 52.3 points, or 0.9 per cent, to 5,873.5 points.
* The broader All Ordinaries index gained 50.3 points, or 0.86 per cent, to 5,910.7 points.
* The June SPI200 futures contract was up 47 points, or 0.81 per cent, at 5,860 points.
* National turnover was 3.1 billion securities traded worth $6.7 billion.
One Australian dollar buys:
* 76.43 US cents, up from 76.10 US cents on Tuesday
* 84.95 Japanese yen, up from 84.19 yen
* 70.70 euro cents, up from 70.07 euro cents
* 61.63 British pence, up from 60.61 pence
* 109.14 New Zealand cents, up from 108.20 NZ cents
GOLD:
The spot price of gold in Sydney at 1700 AEDT was $US1,248.99 per fine ounce, down $US4.51 from $US1,253.50 per fine ounce on Tuesday.
BOND SNAPSHOT AT 1630 AEDT:
* CGS 5.25 per cent March 2019, 1.750pct, up from 1.738pct on Tuesday
* CGS 4.25pct April 2026, 2.663pct, up from 2.642pct
Sydney Futures Exchange prices:
* June 2017 10-year bond futures contract at 97.240 (implying a yield of 2.760pct), down from 97.265 (2.735pct) on Tuesday
* June 2017 3-year bond futures contract at 98.040 (1.960pct), down from 98.050 (1.950pct)
(*Currency closes taken at 1700 AEDT previous local session, bond market closes taken at 1630 AEDT previous local session)
