“The biggest challenge for the authorities is to contain the high inflation psychology that is now taking hold in the economy,” he said.
Westpac’s group statutory net profit came to A$5.7 billion, up 4 per cent.
In New Zealand, strong lending growth and the sale of its life insurance business bolstered the bank’s net profit by 12 per cent to just over $1 billion.
Shares in ANZ, which reported its results last week, fell by 39c or 1.45 per cent to $26.70 but both banks were well off their lows by the market’s close.
Salt Funds managing director Matt Goodson said expectations for the banking sector had been running high after the Bank of Queensland reported surprisingly strong margin expansion at its result in October, which gave rise to higher levels of confidence in the sector generally.
“The market really got the bit between the teeth after the Bank of Queensland result as people anticipated good margin expansion from banks as interest rates rise,” he said.
Commenting Westpac’s result, and ANZ’s last week, Goodson said: “While the banks’ margins had expanded, it was not quite to the degree as the market expected, particularly towards the end of the period.”
A2 Milk, which last week gained permission to sell infant formula in the United States, where there is a shortage, gained nine cents or 1.5 per cent to $5.99.
“While their entry into the US market is pretty limited, some people are getting bullish that perhaps it could herald something more significant, although the evidence of that is pretty light at the moment,” Goodson said.
In the big picture, the positive market vibe offered by a firm finish in the US market last week had been diminished somewhat by news from US tech giant Apple that its iPhone 14 production had been temporarily reduced because of Covid-19 restrictions at its primary assembly plant in Zhengzhou, China.
Among the local share price movements, investors took a shine to transportation technology services company EROAD’s market update, which included news of a five-year agreement with North American food service leader Sysco with an initial order to supply SaaS subscriptions on over 9,000 trucks, the stock gaining 15 cents to $1.38.
EROAD has upgraded its 2023 revenue to forecast to $154m-$164m from a previous guidance of $150m-$170m, while its normalised earnings before interest and tax guidance was zero to $5m - unchanged.
Other tech stocks were firm also - software firm Gentrack gaining 12c to $1.65 and high tech components maker Rakon firming six cents to $1.26.
On the downside, Fletcher Building dropped two cents to $5.12, Third Age Health nine to $1.98, and Serko seven to to $2.69.
Property firm Winton lost five cents to $2.16 and pharmaceuticals company AFT fell 10c to $3.70.
Looking ahead, Goodson said this month’s annual meetings and a slew of first half results would help set future direction.
Takeover target Pushpay reports its first half result tomorrow, as does the newly renamed power company Manawa.
Transport firm Mainfreight reports its interim on Thursday, along with property company Goodman.
Heartland Group holds its annual meeting today while Colonial Motors’ meeting is due on Friday.
