Hopes for a soft economic landing and interest rate cuts triggered a sharp rally in bank stocks, sending the ASX 200 to a record and spurring predictions the benchmark could hit 8000 points by the end of the year.
Closer to home, weak annual gross domestic product growth of 1.5 per cent for the December quarter released on Wednesday, bolstered hopes of earlier rate cuts from the Reserve Bank against existing market expectations for August or September.Betashares economist David Bassanese said the weak GDP data had driven the financials sector higher this week and pushed the ASX 200 closer to his 8000-point year-end target.
The financials sector climbed more than 2 per cent on Friday alone. National Australia Bank added 2.3 per cent to a post-GFC high of $35.11, and ANZ hit its highest level since 2015 at $29.81 a share. Westpac closed at a 2019 high of $27.70, and Macquarie is trading at its highest since April 2022 at $198.78.
Mr Cai said banks’ valuations tended to gain from interest rate-easing cycles as credit growth in the form of home lending expanded, although this cycle may be different given house prices already sit near record highs.
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