A strong profit result from Westpac has propelled the Australian stock market to its strongest morning in two weeks.
At lunchtime the ASX 200 was up 45 points or 1% at 4590 as buyers scrambled into the big banks. The financial sector was up 2.3%, with WBC, NAB and ANZ all advancing more than 3.5%. The mining sector was up 0.8%, while health led the declines, down 1% after PRY joined HSP in the post-earnings dog-house.
Westpac revealed a stronger-than-expected 33% rise in first quarter cash profit, beating expectations. Investors were cheered by signs that bad debts have peaked.
"The market should be happy. The numbers are slightly ahead of expectation," Mark Daniels, head of equities at Aberdeen Asset Management told Fairfax. "Impairment charges show bad debts have peaked sooner than expected."
In economic news, the RBA said it saw no need to continue to raise interest rates quickly but further rises are likely. The minutes of the last board meeting, released today, said the Board, "did not regard [the current] outlook as requiring an increase at every meeting, and they saw the earlier moves to begin withdrawing monetary stimulus promptly as affording the board a degree of flexibility in its subsequent decisions."
Meanwhile, business confidence bounced back this month despite softer business conditions. Confidence rose 7% to +15 points, according to the latest NAB monthly survey. The result cancels out most of last month's 11-point fall.
Asian markets were mostly closed for New Year holidays but Japan's Nikkei edged 0.3% higher.
Gold spiked back through $1,100 an ounce this morning for the first time since the start of the month. The spot price was recently up $12.50 at $1,104.90 an ounce. Crude oil futures were 25 cents higher at $74.25 a barrel.
Wish I'd paid more attention to the Westpac result - nice profits on offer in the big banks this morning. Instead I scalped a few points from PRY and HSP - subsistence wages.
