Shares of Banks surged after the government's re-election ended the threat of dividend imputation changes, increased regulatory scrutiny and capped premiums. The ruling LNP, which only called the financial services royal commission reluctantly, is perceived by investors to be friendlier to the banking industry. Among the banks, Westpac closed 9.2% higher at A$27.75, NAB closed 7.9% higher at A$25.81, ANZ Bank closed 7.8% higher at A$27.86 and Commonwealth Bank was 6.3% higher at A$77.40. NIB Holdings was up 15.8% to A$6.82 and Medibank Private was up 11.5% to A$3.21 with Labor's threat of a two% cap on annual premium increases for the next two years now out of the way.
Health insurers Medibank (MPL) and NIB (NHF) surged by as much as 10% as Labor had plans to cap premium increases in the sector.
Iron ore miner Fortescue Metals (FMG) was up 2.6% thanks to a strong lift in the iron ore price to a five-year high on Friday. The metal has surged by 2.4% or $2.40 to US$100.40/t mainly on concerns of lower supply. There have been disruptions at major iron ore mines in Brazil this year while Cyclone Veronica slowed activity in WA in March.
CURRENCY NEWS: The Australian dollar inclined against the U.S. dollar on Monday, as return of a Coalition government injects greater certainty into the outlook. The Reserve Bank will be in focus this week, with the RBA Board minutes and a key speech by the bank's governor both due on Tuesday. The RBA has recently made it clear the health of the labour market will be a determining factor in its rates decision in coming months. Tomorrow's speech will be the timelier of the two, as the governor can weigh in on last week's data on wages and jobs. Money markets are currently pricing in a 60% chance of a rate cut in June. The Aussie dollar was last at 69.06 US cents on Monday, having bounced from a four-month trough of 68.65 US cents.
Powered by Capital Market - Live News