Major banks lead ASX gains, tracking Wall Street peers
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The news: The major Australian banks rallied on the ASX after their US peers posted strong earnings results overnight.
The numbers: Financials, up 2.37%, was the best performing sector by 2:30pm AEDT, as the ASX 200 index rose 1.33%.
Macquarie Group (3.56%), ANZ (2.86%), Commonwealth Bank (2.7%), National Australia Bank (2.66%) and Westpac (2.1%) all notched significant gains.
The context: The advance followed a spate of solid earnings results from large US banks.
JPMorgan reported a record USD50 billion ($80.5 billion) annual profit, Wells Fargo’s fourth-quarter profit beat expectations, Goldman Sachs reported its best quarterly profit since the third quarter of 2021, and Citigroup swung to a profit in the fourth quarter.
Meanwhile, asset management giant BlackRock unveiled record annual revenue of USD20 billion and took assets under management to USD11.55 trillion.
Shares in JPMorgan (2%), Wells Fargo (6.7%), Goldman Sachs (6%), Citigroup (6.5%) and BlackRock (5.2%) all surged following the results, as did those of Bank of America (2.9%) and US Bancorp (3.8%).
Revenue growth was fuelled by heightened corporate optimism, increased CEO confidence and strong equity and debt markets. The profit increases were also magnified by the absence of 2023’s Federal Deposit Insurance Corp charges to replenish the deposit insurance fund after the regional banking crisis.
