Bendigo and Adelaide Bank tumbles 7.2 per cent while three of the big four banks rank among worst performing blue chips on Wednesday.
A strong day for resources companies helped push Australian blue chips higher on Wednesday, but banks fell sharply as investors began to fret about the mixed effects of higher interest rates across the economy.P/ASX 200 climbed 0.4 per cent higher, adding 25.4 points to close at 7121.1 points, while the SP All Ordinaries benchmark, which tracks a wider number of companies, added 28.4 points to 7347 points to also close 0.4 per cent higher.
Among the big four, Westpac fell by the biggest margin with a 6.1 per cent decline to $21.98. CBA fell 4.4 per cent to $97.47, NAB dropped 4 per cent to $28.91 and ANZ fell 3.3 per cent to $23.89.The declines followed moves by some banks to pass on the increase in interest rates on Tuesday to customers. The Reserve Bank of Australia raised the cash rate by 50 basis points to 0.85 per cent, more than economists had anticipated.
The decline for banks on Wednesday suggests investors are worried that lenders will need to set aside more money for bad loans, overshadowing the benefits from improved net interest margins as rates climb. “The earnings outlook for the banks looks pretty positive. The market is probably getting over-excited about the downside risks.”
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