The scandal-plagued Westpac is the nation’s second largest bank in a sector that dominates the equities market, but this hasn’t restricted the indices from reaching record highs in a year of overall positive gains.
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The ASX top 200 companies opened 0.4 per cent higher to mark a new record high of 2876.3 points, eclipsing the previous all-time intraday high of 6875.5 was reached on July 30. the index did ease back slightly after reaching its high at 1008am.
“It’s clearly not the financials that are really driving up the gains that we’re seeing, they’re still underperforming and is in fact in the red again today,” CMC Markets’ chief market strategist Michael McCarthy told news.com.au.
“The highs that we’re seeing have come despite the financial sector remaining under pressure.”
The market has surged about 25 per cent higher in 2019 and Mr McCarthy said the recent comments from the Reserve Bank of Australia that a lower trajectory for rates will continue into 2020 as well as positive data out of the US overnight is driving the market higher.
“At the moment you would have to say that everything is running to the positive,” he said.
By 10.15am, the ASX200 was at 6,869.8 while the broader All Ordinaries was up 0.29 per cent, to 6970.8 points.
The rise is credited to telco staple Telstra which jumped nearly 1.5 per cent as well as another jump from market darling CSL, with the biotechnology company lifting nearly 1 per cent.
Mining giant BHP was flat at $38.36, Rio Tinto was up 0.24 per cent to $97.23 and Fortescue Metals was down 0.41 per cent to $9.75.
The big four banks — ANZ, Commonwealth, NAB and Westpac — were mixed, ranging from a fall of 0.40 per cent to a rise of 0.26 per cent.
The three main indices on Wall Street finished at record highs overnight, with the Dow Jones Industrial Average up 0.16 per cent, the S&P 500 up 0.42 per cent and the tech-heavy Nasdaq Composite up 0.66 per cent.
The Aussie dollar is buying 67.62 US cents from 67.77 US cents on Wednesday.
WESTPAC OFFERS INVESTORS WAY OUT
Westpac is allowing investors to withdraw from a $500 million share purchase plan it launched two weeks before a money laundering and child exploitation scandal hit the lender’s share price.
The bank said it had held meetings with corporate watchdog ASIC and was now providing a withdrawal option for shareholders who have applied for shares under a non-underwritten SPP launched on November 4 as part of a wider $2.5 billion capital raising.
Westpac said investors have until December 6 to request their withdrawal from the plan, with all other conditions and key dates remaining unchanged. Westpac lost as much as $8.06 billion from is market capitalisation after AUSTRAC announced last week it was taking the bank to court over an alleged 23 million breaches of money laundering laws.
The bank’s share price recovered somewhat after it announced on Tuesday its chief executive Brian Hartzer was stepping down and chairman Lindsay Maxsted would follow suit, but it dipped again on Wednesday.
The Australian Financial Review on Thursday reported ASIC was also broadening its investigation into the bank to include whether Westpac had met continuous disclosure obligations under the Corporations Act for its capital raising. Westpac shares were worth $24.81 before trade on Thursday 6.5 per cent below the $26.55 price before the AUSTRAC allegations were aired.
Under the SPP, investors could purchase shares at $25.32 or, if lower, the five-day volume weighted average price, less 2.0 per cent, up to and including the close of the plan on December 2.
— with AAP reporter Alex Druce