Shares in the big four Australian banks have risen today in general approval – or perhaps relief – among investors of the Murray Financial System Inquiry report.
The jump in the value of the banks helped pull the whole market higher by more than 1.1%.
The NAB was trading 2.1% higher at $33.14, Westpac stronger by almost 2% to $33.66, the Commonwealth by 1.2% to $82.90 and the ANZ by 1.5% to $32.58.
Wall Street closed the week firmer with the S&P 500 index up by 0.2% but the main focus locally has been the banks and the market’s response to the Murray Report.
Most analysts feel the inquiry’s recommendations were mostly as expected and that any increased capital requirements won’t have a large impact on prices – something that had been a point of concern since the release of the interim Murray report.
Chris Weston, chief market strategist at IG, says the inquiry has worked out to be a net positive for Australian banks, judging by price action in the market.
“Financials are flying as the amount of capital speculated that will need to be raised seems fairly achievable, with the end result being a more stable banking sector,” Weston says.
He says it’s worth keeping in mind that the government will be receiving responses to the inquiry recommendations until the end of March and will ultimately release its final response in mid-2015.
“It seems logical that this will inquiry will fade into the background over the next week or so, but ultimately the investment case of buying yield for income is still very much there and if anything seems to be strengthening,’ Weston says.