Stocks end firmly in the black

The local market has jumped more than 0.7 per cent, led by banking optimism.

The Australian sharemarket jumped on the first day of trade for the week, winning back more than half of last week’s losses thanks to a lift in sentiment from a strong US jobs report on Friday night.

At the closing bell, the benchmark S&P/ASX 200 index lifted 40.4 points, or 0.73 per cent, to 5,537.8, while the broader All Ordinaries index tacked on 40.1 points, or 0.72 per cent, to 5,625.7.

The gains were driven by the financial sector, which was aided by a strong lead from the US banks — after jobs numbers far outstripped expectations — and a robust result from Bendigo and Adelaide Bank.

The regional lender saw its shares surge 4.3 per cent to $10.15 after delivering better-than-expected earnings for the full-year, although margins were seen under pressure.

“Bendigo Bank has set a positive tone for companies reporting this week with a modest lift in top line profits, slightly better than forecast,” CMC Markets chief market strategist Michael McCarthy said.

The banking sector will see more significant results come out on Wednesday as Commonwealth Bank is due to report.

Ahead of its results, CBA traded up 1.4 per cent, matching the gain of NAB, while ANZ bounded 1.8 per cent and Westpac put on 0.8 per cent.

The heavy bid on the banks came after Shaw & Partners spruiked them in a note to investors that in general warned of a toppy market.

“The banking sector stands out at the best risk/reward play at the moment, especially since the lower RBA cash rate implies lower bad and doubtful debts, greater demand for credit and the fact that it wasn’t all passed on means higher margins,” the report read. “What’s not to like.”

Earnings season action will gain momentum as the week progresses with the likes of CBA and Telstra in the spotlight.

“The season hits full stride this week,” CMC’s Mr McCarthy noted. “Key reports from a broader economic view include Transurban, Carsales, AGL and Telstra.”

In the meantime, Argo Investments drew some market attention after detailing a record-high dividend, while Macquarie Media was in the good books of traders after beating earnings guidance.

At the close of trade Argo added 0.4 per cent, while Macquarie Media jumped 3.1 per cent.

Elsewhere, commercial property group Dexus weakened 0.5 per cent after offloading the high-profile Southgate complex in Melbourne for almost $600 million to Singapore interests.

The resources space was a major contributor to the gains, with the energy sector leading the way through a 1.5 per cent advance.

Oil and gas group Santos climbed 0.43 per cent at $4.68, while Woodside leapt 1.9 per cent to $27.41.

Among the miners, BHP secured a 2.3 per cent gain to $20.48, while Rio Tinto lifted 1.2 per cent to $50.12 and Fortescue rose 2.4 per cent to $4.67 after a 3 per cent rise in iron ore prices.

The gold miners prevented the materials sector from outshining the broader market as Newcrest tumbled 4.2 per cent and Regis Resources skidded 3.3 per cent.

The laggard for the session was the telco sector, weighed down by sector behemoth Telstra as it lost 0.88 per cent to $5.61.

Meanwhile, the Australian dollar edged clear of US76c, ending the local session at US76.13c.