Aussie shares up 1.5pc as sentiment and banks lead gains

THE Australian share market has rebounded from Thursday’s plunge, with the financial sector leading the charge after the easing of some regulations for American banks.

The S&P/ASX200 benchmark index closed yesterday up 86.4 points, or 1.49 per cent, at 5904.1 points, while the All Ordinaries index was up 83.8 points, or 1.41 per cent higher, at 6011.8.

“A good strong day for the Australian market, and it’s pretty clear that the most important factor here and around the globe is sentiment,” said CMC Markets chief market strategist Michael McCarthy.

That sentiment turned positive after the US Federal Reserve eased capital requirements on banks while ordering them to suspend share buyback programs and keep dividend payments at current levels.

“I think that investors have taken that to mean the Fed is willing to do whatever is needed to support economies and markets,” Mr McCarthy said.

The financial sector was biggest gainer, up 2.7 per cent with gains for all of the big four lenders.

CBA rose 2.4 per cent to $69.27, ANZ gained 3.0 per cent to $18.80, NAB climbed 2.7 per cent to $18.40 and Westpac added 3.3 per cent to $17.99. Macquarie was more restrained, gaining 1.7 per cent to $119.19, but other wealth managers shone.

Magellan gained 5.4 per cent, Challenger rose 4.3 per cent, IOOF added 8.5 per cent, Pendal Group gained 3.8 per cent and AMP rose 4.8 per cent. Also, insurance companies QBE and Suncorp were both up 3.9 per cent, to $8.88 and $9.54, respectively.

Qantas fell 9.1 per cent to $3.81 after its shares returned to trade following a $1.4 billion equity raising in which it sold shares for $3.89.