MELBOURNE, Australia--Australia's big banks again drove the local stock market higher Thursday, aided by gains in energy companies as production reports continue to roll out and after crude prices hit a six-week high.
The four major banks rallied for a second straight day, following a report by the prudential regulator that set out a target on capital that marked only a moderate increase from current levels and gave the lenders until 2020 to adopt the changes.
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Worries the capital benchmark might prove more onerous had weighed on bank shares in recent weeks, and the regulator's report sparked a shift in sentiment as that weight was removed and after several investment banks lifted their target prices for the banks' shares.
Although oil futures paused in Asian trading, it came after prices climbed during the U.S. session as a larger-than-anticipated decline in crude inventories there supported the view the oversupplied global market is rebalancing.
Rising a second day, the S&P/ASX 200 rose 29.4 points, or 0.5%, to finish at 5761.5. The Big Four banks, which are among the largest stocks in the index, collectively added about 25 points to offset pockets of weakness among materials, consumer and property stocks.
Australia & New Zealand Banking again led the major banks, gaining 2.9% to bring the rise this week to 4.8% so far. Westpac Banking strengthened by 2.4%, National Australia Bank added 1.6% and Commonwealth Bank of Australia rose 0.9%.
Among energy stocks, Woodside Petroleum was up 0.7% after it released its second-quarter production numbers and Santos jumped 8.3% after its own quarterly result showed improved production as well as progress cutting debt and reducing production costs.
BHP Billiton, which has oil and gas as well as mining operations, rose 0.6% but Rio Tinto slipped 0.2% and Fortescue Metals Group dropped 3.5%.
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(END) Dow Jones Newswires
July 20, 2017 03:10 ET (07:10 GMT)