Bank Stocks Gain as Markets Open Higher

Submitted by Craig Strzelecki on 19 May, 2008 - 14:55

As the Westpac's deal foresees counter bid from other banks, trading of bank stocks have plummeted over the last week. The Big Four banks have rallied and the five biggest players have touched their record high. The Westpac deal with St. George has renewed interest in bank stocks which are usually taken as safe haven. According to portfolio manager, Matthew Kidman from Wilson Asset Management, "For 10 years everyone has said that banks are a safe haven -- and they're definitely not that because they're highly geared and we've seen the share prices get thumped."

The Australian banks have capitalised so far and the investors have managed to extract profits even in tough times. Stocks for all major Australian banks have been on the road to recovery after the prices hit all time low in March 17. Now, the banks are expected to do well in the next 12 to 18 months.

The Australian market opened higher as the commodity prices including gold, oil and industrial metal projected gains. The Australian Dollar had also reached its highest against the US Dollar and was being traded at 96 cents at 6:13 am. The benchmark S&P/ASX200 had risen 0.75%, or 44.7 points, to 5975.7. The June share price index gained 22 points at 5975 at the Sydney Futures Exchange at 6:59am.

The Chinese interests about the possible stakes in BHP Billion have further boosted the oil prices. This has further led to increased trading and appreciation of oil stocks in the Australian market. However, some investors had also been skeptical about commodity prices and feared that commodity boom may soon end suddenly as it witnessed in past.

On the commodities market, gold experienced its all time high in three weeks when spot touched $US 904.30. Aluminium and zinc also experienced a gain as markets feared break in supplied due earthquake in China. Copper also gained momentum in the commodity markets which is usually perceived as barometer of underlying economic activity. Investors are experiencing gains in nearly all markets due to which the credit crisis is being perceived as a fading memory.

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