Banks Lead 2.9% Rally as Utilities Surge
Australian equities delivered their strongest week in roughly 10 months, with the S&P/ASX 200 climbing 2.9% as heavyweight bank earnings reset sentiment. Financials surged 6%, utilities rallied 9.4%, and investors rotated decisively into defensives.
However, the tone shifted into Friday. Profit taking hit technology names hard, with volatility spiking across high growth stocks.
Globally, commodities stabilised after the prior week’s sell off. Copper rebounded 3.8%. Brent crude firmed. The Australian dollar emerged as one of the strongest major currencies, supported by a softer USD and continued resilience in domestic data.
Key Themes Driving the Week
Bank earnings were the dominant catalyst. Results from CBA and ANZ exceeded expectations, reinforcing confidence in balance sheet strength and net interest margin resilience.
Financials carry significant index weight. When banks move, the ASX follows.
Defensive rotation was equally notable. Utilities rallied 9.4% as investors sought earnings stability. Energy transition narratives also supported flows into select names.
Meanwhile, AI disruption remained a recurring theme across earnings calls. Brokers are increasingly reassessing high multiple technology stocks in a higher rate environment.
Friday reminded investors that volatility has not disappeared.
Australian Index Performance
The rebound was broad based, though performance dispersion was significant.
Major Indexes
| Index | Weekly Move |
|---|---|
| S&P/ASX 200 | +2.9% |
| All Ordinaries | +2.8% |
| ASX Small Ordinaries | +3.2% |
Small caps outperformed modestly. Liquidity improved mid week before fading into Friday.
Sector Performance
| Sector | Weekly Move |
|---|---|
| Financials | +6% |
| Utilities | +9.4% |
| Materials | +1.8% |
| Information Technology | -1.5% |
| Consumer Discretionary | +2.1% |
| Energy | +1.3% |
Utilities led decisively. Technology lagged, particularly into Friday’s session. The divergence highlights ongoing rotation rather than broad risk on momentum.
ASX Big Movers
Bank heavyweights drove index gains, while select tech names saw sharp reversals.
Top Gainers
ANZ rose 8.47% following its earnings update, closing near $29.50 mid week.
CBA gained between 5% and 7% across the week, trading above $150 after beating forecasts.
Aussie Broadband advanced roughly 12% after AGL agreed to sell its telco arm in exchange for shares, strengthening ABB’s strategic position.
Top Losers
WiseTech fell 10.41% on Friday alone, closing at $42.62. Weekly volatility was elevated.
Life360 declined 10.09% on Friday to $22.02, reflecting sensitivity in high growth names.
Pro Medicus slipped around 4% to 5% across the week amid broader tech weakness.
The contrast between banks and tech was stark.
Global Index Snapshot
US markets were mixed as investors digested earnings and inflation signals.
| Index | Weekly Change |
|---|---|
| S&P 500 | +1.2% |
| Dow Jones | +0.8% |
| Nasdaq | +1.8% |
| Nikkei 225 | +2.1% |
Asia broadly followed Australian strength. The Nasdaq outperformed modestly, though intra week volatility remained elevated.
Commodities Stabilise
After last week’s rout, commodities found footing.
| Commodity | Weekly Change | Notes |
|---|---|---|
| Brent Crude | +2% | ~$69 per barrel |
| Gold | -1% | Mild pullback |
| Silver | Flat | Consolidating |
| Copper | +3.8% | Volatility remains high |
| Iron Ore | +1.5% est. | Stabilising |
Copper’s rebound was notable. Industrial metals remain highly sensitive to China sentiment. Gold softened slightly as risk appetite improved.
Currency Markets
The Australian dollar outperformed most major peers.
| Pair | Weekly Change |
|---|---|
| AUD/USD | +1.2% |
| USD/JPY | -1.5% |
| EUR/USD | +0.8% |
| GBP/USD | +0.5% |
The AUD benefited from relative yield support and stabilising commodity prices. USD weakness provided additional tailwinds.
What It Means for Investors
The 2.9% weekly rally signals renewed confidence in large cap earnings resilience. Financials are regaining leadership. Defensives are attracting capital again. Technology remains fragile. Valuation sensitivity persists.
The broader picture suggests selective optimism rather than a full risk on regime shift. Rotation is driving performance, not broad speculative excess. Next week, attention turns to global macro data and ongoing earnings updates. Volatility should be expected.
The trend has improved. Conviction remains cautious.