A rebound in the big banks propelled the share market towards a third day of gains as shareholders welcomed the departure of Westpac’s CEO.
The ASX 200 rallied 63 points or 0.9 per cent to 6794 by mid-session after Brian Hartzer fell on his sword. Westpac shares jumped 1.8 per cent on the news.
The bank’s stock slumped to a nine-month low yesterday after the financial intelligence regulator Austrac filed civil charges, alleging the bank failed to comply with legislation governing money laundering and the financing of terrorism. Chief Financial Officer Peter King will take over as Acting CEO on December 2.
The scandal cast a long shadow over the banking sector. CBA has fared best since the charges were announced, rising 0.8 per cent this morning. NAB rallied 0.7 per cent off a six-month low. ANZ gained 0.8 per cent. The sector rally would have been stronger yet if not for a 6.4 per cent dive in Bank of Queensland after the regional lender tapped institutional shareholders for funds. The bank announced it had raised $250 million at a hefty discount.
The energy sector was the standout after Canadian company Couche-Tard made a second bid for Caltex. Shares in the Australian fuel supplier surged 12.5 per cent to just below the revised offer price of $34.50 a share. The board rejected an earlier offer of $32 as undervaluing the company.
Fortescue probed fresh 11-year highs, rising 2 per cent after the recent rally in iron ore extended into a tenth session yesterday. Rio Tinto advanced 0.5 per cent to its strongest level since early August. BHP edged up 0.2 per cent.
The mood on global markets was boosted by a record close on Wall Street as investors welcomed positive signals from trade talks. The S&P 500 put on 23 points or 0.75 per cent. S&P 500 index futures rallied nine points or 0.3 per cent this morning.
Expectations for further rate cuts were raised by news that consumer confidence fell to a four-year low last week. The ANZ-Roy Morgan Index slumped 2.8 per cent. ANZ Head of Australian Economics David Plank said, “Consumer views on the future economic outlook are now at their lowest in the history of the survey.”
What’s hot today and what’s not:
Hot today: wearable-tech company Simavita has been one of the buys of the year for shareholders who picked up stock at five-tenths of a cent last week. The share price hit 8.8 cents this morning – a staggering return of 1,660 per cent in a few sessions – after the company announced yesterday it had been granted European regulatory approval for its Smartz diaper technology. The company’s sensing technology provides real-time feedback to parents and carers. The share price was last trading at 7 cents, up 4.1 cents or 141 per cent for the session.
Not today: almost 300 people lost their jobs this morning after Metals X suspended mining at its troubled Nifty copper mine in the Pilbara. The company announced it was placing the mine on care and maintenance after production failed to meet expectations. The cost of the redundancies will be largely covered by selling existing concentrate. Shares fell 10.25 per cent to a record low.
China’s Shanghai Composite advanced 0.2 per cent, Hong Kong’s Hang Seng 0.5 per cent and Japan’s Nikkei 0.8 per cent.
Turning to commodity markets, Brent crude futures dipped two cents or less than 0.1 per cent this morning to $US63.63 a barrel. Gold declined $3.70 or 0.3 per cent to $US1,453.20 an ounce.
On currency markets, the dollar was steady at 67.77 US cents.