Banks jump as market rallies

The big banks have all jumped at least 1pc in early trade, boosted by NAB’s result.

The Australian sharemarket has rallied at the open as an earnings result from NAB that broadly met market expectations drove a strong bid on the financial sector.

At the 10.15am (AEST) official market open, the benchmark S&P/ASX 200 index advanced 22.8 points, or 0.43 per cent, to 5,293.9, while the broader All Ordinaries index gained 20.8 points, or 0.39 per cent, to 5,356.4.

The big banks all jumped at least 1 per cent, pacing a market that was otherwise weighed by a further slump in BHP stock and weakness in media.

“The biggest drag on the ASX is set to be the materials sector again today,” IG market analyst Angus Nicholson said.

“NAB’s earnings results this morning are largely in line with market expectations and should help cushion the banks a bit today, but market sentiment is not positive at the moment which could drag on the sector nonetheless.”

NAB surged over 3 per cent after reporting a 6.5 per cent lift in cash earnings for the first half. The banking behemoth largely met market expectations, with investors cheering the news given rivals Westpac and ANZ had fallen short of forecasts earlier this week.

NAB shares jumped 3.2 per cent to $28.16, pulling the financial sector along with it.

Elsewhere, ANZ leapt 1.8 per cent to $25.34, CBA added 1 per cent to $75.32 and Westpac lifted 1 per cent to $30.61.

Curbing broader market gains was a fresh drop in BHP stock, which lost 0.64 per cent to $18.67 after enduring its worst daily fall in over seven years on Wednesday.

Rival Rio Tinto rose 0.76 per cent to $48.21, while iron ore miner Fortescue held steady at $3.13 despite weakness in iron ore prices overnight.

Sentiment was markedly better for the energy sector as Santos bounded 1.2 per cent to $4.25 and Woodside inched up 0.44 per cent to $27.22 on the back of a slight gain in crude prices during the US session.

Elsewhere, Telstra bucked the broader trend to edge down 0.27 per cent to $5.61, while Qantas lifted 0.59 per cent to $3.40 and Seven West Media tumbled 5.4 per cent to $1.05 after a ratings downgrade from analysts at Credit Suisse.

The news was markedly better for James Packer’s Crown Resorts, which soared 3.9 per cent to $12.28 after trimming its stake in Melco Crown.

Retailer Woolworths rebounded marginally from its Wednesday tumble, adding 0.87 per cent to $20.89.

Meanwhile, the Australian dollar has held around the US74.6c mark in early trade, a far cry from Tuesday’s US77c reading.

The Australian exchange slumped 1.5 per cent on Wednesday, dragged down by a horror showing from materials stocks and a 6 per cent sell-off at Woolworths as S&P downgraded its credit rating.