Australian shares rallied on Friday as reports that the country's biggest lender was shedding jobs to cut costs
boosted financial stocks, pushing the benchmark to its biggest weekly gain in seven weeks.
The S&P/ASX 200 index rose 52.6 points, or 0.85 percent, to 6,251.3 at the close of trade. The index rose 1.1 percent over the week, its best performance since the week ended Feb. 22.
Financial stocks surged 1.6 percent after a lacklustre performance across the week. Top lender Commonwealth Bank of Australia rose 2 percent to boost the benchmark.
Before markets opened, The Australian newspaper reported that Commonwealth Bank of Australia planned to cut more than 10,000 jobs to save costs and boost profitability.
"Markets are always looking for how the banks are going to grow their earnings and one suspects that a large amount of that is going to come from cost cutting," said Chris Weston, head of research at Pepperstone brokerage.
"Reducing the headcount by 10,000 will only boost the bottom line over a period of time. You could make an assumption that if CBA is cutting costs in this fashion, then there may be other banks that follow suit," he added.
All "Big Four" banks were higher, with Westpac Banking Corp rising 1.4 percent, Australia and New Zealand Banking Group rising 2 percent and National Australia Bank up 1 percent.
Adding to the positive sentiment, the Reserve Bank of Australia (RBA) said stress tests indicate banks have sufficient capital to withstand double digit unemployment rates and housing price falls exceeding 30 percent.
"Overall, the financial system appears much better placed to respond to a range of challenges than it was a decade ago," it added.
Energy stocks also rose, with Woodside Petroleum gaining 1 percent while Origin Energy advanced 0.7 percent.
Capping gains on the index, mining stocks fell 0.4 percent as investors took profit for a third session after a 1.7 percent surge among miners on Monday.
Iron ore prices rose on the day, but stood shy of the strong gains notched earlier in the week amid lower production forecasts from major miners and robust demand from China.
New Zealand's benchmark S&P/NZX 50 index rose 0.02 percent, or 1.73 points, to finish the session at 9,768.33, posting a weekly loss of 0.9 percent to snap a nine-week winning streak.
Among top gainers, Spark New Zealand rose 2.1 percent.
Comments
Comments are closed.