Banks gain ground on flat day for share market

The share market has closed relatively flat after spending much of the day in the red.

The All Ordinaries Index finished four points lower at 5,230 while the ASX 200 was down five points to 5,197.

The big banks gained ground across the day, following an announcement from Westpac that it was to raise its variable mortgage rates by 20 basis points.

The bank said the increase was to cover the cost of new regulations that require banks to increase their capital reserves.

After the announcement, chief executive of the National Australia Bank said the bank's mortgage rates were under review.

The Commonwealth Bank, which lifted almost 0.5 per cent to $74.56, said it was yet to decide on whether to raise its interest rates.

Westpac said Australians now feel more confident about the nation's economic prospects.

According to the latest survey by Westpac and the Melbourne Institute, consumer confidence jumped from September to October following the change of prime minister.

The latest consumer sentiment index rose by 4.2 per cent in October to 97.8.

Westpac chief economist Bill Evans said that lift was good news for the economy.

In China, however, new official data has shown the country's economy is slowing down.

Consumer prices in China rose 1.6 per cent in September, which was below expectations.

Prices at the farm and factory gate slumped by nearly 6 per cent.

Analysts say the data could see Chinese authorities inject more stimulus into the economy.

Meanwhile, a big drop in Chinese imports has heightened concerns about the global economy.

The weak data weighed on US and European share markets overnight.

The Dow Jones Index lost 50 points or just over 0.25 per cent to 17,082, the S&P 500 fell 14 points to 2,004 and the Nasdaq lost 42 points to 4,797.

The big miners went backwards, with Rio Tinto losing 0.7 per cent to $53.03.

Just after 5:00pm (AEDT), spot gold had risen to $US1,172 an ounce while West Texas Crude Oil was sitting at $US46.65

The Australian dollar was weaker against the majors, buying 72.18 US cents, 47.23 British pence, 63.34 Euro cents, 86.30 Japanese yen and nearly $NZ1.08.

Source: ABC News

Leave a Reply

Your email address will not be published. Required fields are marked *