Banks keep rising and push ASX higher

Australia’s big four banks are enjoying another surge in early trade on the ASX, and the main indices are more than 1.5 per cent higher.

The S&P/ASX200 benchmark index was up by 99.8 points, or 1.73 per cent, at 5874.8 points after the first 15 minutes of trade on Thursday.

The All Ordinaries index was 97.7 points, or 1.66 per cent higher, at 5982.6.

Investors have pushed the financials sector 3.92 per cent higher and NAB had the greatest gain – 6.02 per cent.

The enthusiasm for banks follows Wednesday’s buying spree, which lifted some of their share prices 10 per cent higher.

Bendigo and Adelaide Bank has outlined a provision of $148.3 million for potential future impacts on account of the COVID-19 pandemic.

The regional bank says the extra charge to its accounts is based on a significant change to the economic outlook including lower GDP, higher unemployment and a reduction in residential and commercial property prices.

Information technology was the next best sector, up 1.43 per cent.

Most sectors were higher, although energy was among the laggards and down 0.42 per cent.

Bank stocks also did well in the US overnight. The S&P 500 financial index led gains among major sectors.

US investors were buoyed by the continued easing of lockdowns.

The Dow Jones Industrial Average rose 553.16 points, or 2.21 per cent, to 25,548.27, the S&P 500 gained 44.36 points, or 1.48 per cent, to 3,036.13, and the Nasdaq Composite added 72.14 points, or 0.77 per cent, to 9,412.36.

In Australia on Thursday morning, Reserve Bank Governor Philip Lowe is appearing before the Senate Select Committee, where he has said the economic downturn from coronavirus may not be as severe as predicted.

Businesses’ capital spending data from the first quarter of the year will also be published on Thursday.

ANZ Bank economists expect a drop of 3.3 per cent on the previous quarter.

One Australian dollar was buying 66.24 US cents at 1015 AEST, down from 66.44 US cents at the close of trade on Wednesday.

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