Banks, energy drive stockmarket rally

Broadbased market gains have been led by a banking and energy bounce.

The Australian sharemarket has ended the week on a positive note, with broadbased gains driven by a rally in the big banks as well as takeover activity and a successful debut for plumbing group Reliance Worldwide.

The energy sector served as the major outperformer however, bounding 1.5 per cent as crude prices trended higher on a weaker US dollar.

At the official market close, the benchmark S&P/ASX 200 index had added 26.8 points, or 0.51 per cent, to 5,252.2, while the broader All Ordinaries index rose 26.6 points, or 0.5 per cent, to 5,316.

The benchmark lost 0.39 per cent on the week, however, with gains on the bookends offset by three straight days of falls midweek.

Consumer staples led the way among the weekly gainers thanks to the sentiment boost from a takeover offer for Pacific Brands, while telecommunications served as the laggard.

On Friday, investors were able to shrug off a soft lead from Wall Street as robust credit data drove a bid on the big banks.

“The strength in business borrowings bodes well for the economy,” CommSec economist Savanth Sebastian said.

“Business borrowings lifted by 0.3 per cent in March, with annual growth just shy of 7-year highs. And while it is still early days, it is a welcome result.”

ANZ rose 1 per cent to $24.27, CBA inched up 0.05 per cent to $73.89, NAB gained 0.67 per cent to $27.19 and Westpac tacked on 1.2 per cent to $31.05.

Investment bank Macquarie Group went in the opposite direction, tumbling 2.8 per cent to $63.50 as Citi cut the group to sell from neutral.

The latest jump in crude prices aided the energy sector, with Santos advancing 2.1 per cent to $4.80, Woodside rising 2.2 per cent to $28.34 and Origin eking out a 0.37 per cent gain to $5.49. The latter lagged despite announcing a 49 per cent lift in sales for the third quarter.

The materials space followed suit as BHP Billiton lifted 0.53 per cent to $20.58 and Rio Tinto leapt 2.5 per cent to $51.55.

Iron ore miner Fortescue stood out, jumping 4.9 per cent to $3.41 after the iron ore price rebounded on Thursday night.

Stock in detention centre operator Broadspectrum soared 32 per cent to $1.48 after the firm’s board belatedly backed a takeover offer from Ferrovial. The $1.50 a share offer appeared doomed earlier in the week but is now almost certain to succeed as investors look to avoid exposure to the uncertainty surrounding Manus Island.

Pacific Brands eased 0.87 per cent to $1.145, leaving it broadly in line with the $1.1 billion valuation ascribed by US-based suitor Hanesbrands, while plumbing outfit Reliance Worldwide skyrocketed 18 per cent on debut to $2.95, with investors piling into the largest listing of the year so far.

Elsewhere, Telstra inched down 0.37 per cent to $5.36 and Qantas weakened 1.5 per cent to $3.22 as rising oil prices were seen as a headwind.