Commonwealth Bank Shares Rise Nearly 2 Percent as Banks Lead ASX Higher on Rate Hike Expectations

Commonwealth Bank of Australia rose nearly 2% on Monday, leading gains among the country’s major lenders as the ASX 200 struggled amid renewed U.S. military action against Iranian targets in the Strait of Hormuz. The bank’s shares traded at A$159.90, up A$2.65 (1.69%) on the Australian Securities Exchange. Westpac, ANZ and National Australia Bank also gained roughly 1.5% to 2.1%, helping offset weakness in materials. The rally coincided with a shift in rate expectations: Morgan Stanley now forecasts the RBA will raise the official cash rate at its Sept. 29 meeting by 25 basis points to 4.6%. Stronger inflation in July was cited as “crystallising” upside risks. Higher rates are generally seen as supportive for bank earnings due to wider lending-deposit margins.