Australian Stock Market Rises on Favorable Federal Budget and NAB's Record Profit

The Australian stock market closed higher on May 11, driven by investors' positive response to the federal budget, which was seen as beneficial for future investment. The National Australia Bank (ASX:NAB) recorded a record first-half profit, and the bank's decision to slash costs by axing thousands of jobs also contributed to the market's gain. Despite a significant decline in the US market overnight, consumer stocks made gains, expecting a boost in consumer spending due to tax cuts in the budget.

Key Takeaways:

• The Australian stock market closed higher on May 11, with the S&P/ASX200 index increasing by 13.5 points to 4005.7 and the all-ordinaries lifting by 9.5 points to 3958.6.
• The National Australia Bank (ASX:NAB) reported a 17% increase in net profit to $2.54 billion for the first half, driven by one-off items.
• The bank plans to axe around 4,200 positions, or 10.5% of its total workforce, as part of its efforts to turnaround its fortunes.
• Consumer stocks made gains, expecting a boost in consumer spending due to tax cuts in the budget.
• The major banks, apart from the Commonwealth Bank, were higher, while the big miners and global media player News Corp lost ground.
• ABN Amro Morgans senior client adviser Tony Dennis attributed the market's gain to the favorable response to the budget and tax cuts that put more dollars back in consumers' pockets.

Statistics:

• The S&P/ASX200 index increased by 13.5 points to 4005.7.
• The all-ordinaries lifted by 9.5 points to 3958.6.
• The National Australia Bank reported a 17% increase in net profit to $2.54 billion for the first half.
• The bank plans to axe around 4,200 positions, or 10.5% of its total workforce.
• The Dow Jones industrial average slumped 103.23 points, or 0.99%, to 10,281.11 overnight on Wall Street.

Sources:

• Asia Pulse, May 11
• Australian Stock Exchange (ASX) data
• National Australia Bank (ASX:NAB) financial report (no date specified)