What: The share prices of Australia and New Zealand Banking Group (ASX: ANZ) and National Australia Bank Ltd. (ASX: NAB) today lifted the S&P/ASX 200 (Index: AXJO) (ASX: XJO). In afternoon trade, ANZ's share price was 2.4% higher, while NAB climbed 2.35%.
So what: Both banks held their Annual General Meetings today with positive tones throughout the addresses by the CEOs and Chairmen. Perhaps more importantly, however, was the US Federal Reserve's decision to raise interest rates overnight.
As the Sydney Morning Herald wrote earlier today, the Fed's decision to raise interest rates by 0.25%, "officially marks the end of the global financial crisis."
For Australia's banks, much like the rest of the global marketplace, it's a chance to let optimism come back into our investing decisions. Undoubtedly, there will be consequences for raising interest rates for the first time in nine years, but the Fed will be keeping a close watch on economic growth and inflation as a matter of course.
Now what: Each of Australia's major banks, including Westpac Banking Corp (ASX: WBC) and Commonwealth Bank of Australia (ASX: CBA), have rallied higher today following strong leads from global markets overnight.
Looking ahead, the Australian economy is now expected to undergo a significant transition away from the mining and resources sector. The effects of which could have an adverse impact on the major banks. However, with ongoing regulatory scrutiny, Australia's 'Big Four' are now well-capitalised and appear better placed to deal with challenges ahead.
