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NAB - National Australia Bank raises interest rates

NAB raises interest rates

The new rate takes effect from tomorrow morning

National Australia Bank has announced an increase of 0.09 of a per cent to its variable home loan interest rate.

The rise brings the bank's variable rate tThe new rate takes effect from tomorrow morning.o 9.36 per cent.

The new rate takes effect from tomorrow morning.

The bank says the change reflects the sustained increases to short- and long-term wholesale funding costs.

 

The Australian share market closed more than three per cent higher as bargain hunters snapped up stocks in droves following signs of improved business confidence in the United States.

At the close on Tuesday, the benchmark S&P/ASX200 index was 190.9 points or 3.72 per cent higher at 5318.4, while the broader All Ordinaries gained 169.5 points or 3.27 per cent to 5353.5.

Australian stocks rose to their highest in almost three weeks led by banks after JPMorgan Chase & Co. raised its bid for Bear Stearns Cos. and U.S. home sales unexpectedly climbed, easing concern about tumbling asset prices.

Commonwealth Bank of Australia, the nation's biggest provider of home loans, jumped the most in almost 16 years, while St. George Bank Ltd. advanced to its highest in more than two weeks after they booked gains from Visa Inc.'s initial share sale.

``Australian banks have come off a dramatically oversold position,'' said Tom Murphy, head of investment research at Deutsche Bank AG in Sydney and who manages about $1 billion. ``They represent compelling value.''

The benchmark S&P/ASX 200 Index gained 190.90, or 3.7 percent, to 5,318.40 at the close in Sydney, its highest since March 6, after it was closed for four days over the Easter public holidays. The S&P/ASX index of seven Australian banks is valued at 11 times estimated earnings, 28 percent cheaper than its five-year average, after tumbling 23 percent in 2008.

The retailers were stronger, with Woolworths putting on $1.27 to $29.27, David Jones gaining 16 cents to $3.54 and Harvey Norman adding 19 cents to $3.82.

Wesfarmers, the owner of Australia's second largest retailer, Coles, picked up $1.04 to $37.99.

The media sector was stronger, with Consolidated Media Holdings adding 11 cents to $3.64, Fairfax finding 13 cents to $3.60, News Corp gaining 80 cents to $21.40 and its non-voting shares putting on 76 cents to $21.16.

The energy sector was mixed, with Oil Search adding nine cents to $4.52 but Woodside declined 91 cents to $50.35.

Santos gained seven cents to $13.10 after its chief executive John Ellice-Flint resigned from his post effective immediately, with the oil and gas producer deciding to seek a replacement for company's next phase of growth.

The spot price of gold was lower and at 1630 AEDT was trading at $US925.20 per fine ounce, down $US10.60 on the previous local close of $US935.80 an ounce.

The gold miners were weaker, with Newcrest dropping 50 cents to $30.80, Newmont shedding 23 cents to $4.95 and Lihir steady at $3.60.

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