Since the market closed on Friday, the benchmark S&P/ASX 200 index has increased by 2.1% while the broader All Ordinaries index has gone up by 1.9%.

These gains were predominantly driven by the financial sector as Labor’s threat of changes to negative gearing, capital gains tax and imputation credits are now off the table. With these uncertainties gone, the big four banks have increased in value by more than 8-12% as investors continue to pile their money back into the banking sector which pays highly franked dividends.

Shares in the mortgage broking industry have also rallied as the Coalition Government have decided not to adopt the banking royal commission’s recommendation to limit commissions and end trailing commission for mortgage brokers. Investors in the private health insurance sector were also one of the big winners of the election as Labor’s proposal to cap premiums would not be implemented.

With negative gearing restrictions removed, a possible cut in interest rates and the government’s new First Home Loan Deposit Scheme now on the coalition’s agenda, experts expect that housing prices may not fall much further, and the bottom of the market is around the corner. My colleague Pierce Hanlen outlined this announcement in last week’s blog, which you can read HERE 

Despite concerns of global headwinds, analysts continue to hold an optimistic view on the Australian share market.

As always, our advice to you is; “block out the noise, invest in good quality assets and returns will likely follow.”