Insurers open positively as the market soars above 5,000

The market has reacted to news out of China showing increased lending support.

Owen Raszkiewicz

Owen Raszkiewicz is a Motley Fool Contributor. Owen has been a Contributor since 2013, having also spent time as a Fool writer/analyst. He also worked as an Investment Analyst at Zenith Investment Partners, Australia's top research house specialising in managed funds. Owen has appeared on Channel 10's The Project and was invited on the BBC. He holds a Masters of Applied Finance, Masters of Financial Planning, Bachelor of Technology, Advanced Diploma of Financial Services and Diploma of Mortgage Broking Management. In addition, Owen has passed Level 1 of the Chartered Financial Analyst (CFA) Program. He has taken the Banking + Finance Oath (BFO). When he is not writing, Owen is Managing Director of Rask Finance, an Australian financial education company. You can email him: [email protected].

Published July 22, 2013 12:09 pm AEST

The S&P/ASX 200 (ASX: XJO) (Index: ^AXJO) has opened strongly this morning, pushed higher by financial and insurance stocks.

Just before midday the benchmark was up 50 points, surpassing 5,000 for the third time this year. Our biggest insurers, including Suncorp (ASX: SUN), QBE (ASX: QBE) and Insurance Australia Group (ASX: IAG), are all up over 1%, with QBE leading the way with a 1.7% rise.

The market has been boosted by reports that the People's Bank of China said banks would now be allowed to set their own lending rates. The move hopes to stimulate the world's second largest economy and return growth to positive trend.

IG market strategist, Chris Weston says the rally is more of a "psychological boost" than anything else, it shows that China is trying to support increased growth.

In addition to the insurers, the big financials also opened strongly, with Macquarie Group (ASX: MQG) up 3.3% in early trading. Surprisingly our biggest miners are lagging the market with only modest gains across the board.

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Motley Fool contributor Owen Raszkiewicz does not have a financial interest in any of the mentioned companies.

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