Despite US core inflation showing no signs of slowing, shares are heading towards a strong finish to the week as investors cite an oversold market, and sentiment shifts on local bank stocks

Which shares excelled?

Bank shares have been responsible for steering the local share market higher throughout much of the week, with confidence returning to the sector in light of the FY22 earnings report from Bank of Queensland (ASX: BOQ). 

While the regional lender expects lending to tighten over the coming months, and property prices to continue sliding, it pointed to higher net interest margins (NIM) in the final quarter of the financial year. That played a central role in helping it boost its cash earnings per share by 5%, in turn supporting a higher dividend.

It was news of higher NIM that buoyed BOQ banking peers in Westpac (ASX: WBC), ANZ (ASX: ANZ), and Bendigo & Adelaide Bank (ASX: BEN), among others. The industry has faced significant pressure over the last couple years with interest rates at rock bottom and lenders fighting it out in the mortgage market, putting downward pressure on margins. 

However, with interest rates increasing and still likely to head further north, and the full effects of recent cuts yet to flow through to banks, investors are suddenly more optimistic about the outlook for the banks before we receive more updates from the sector at the end of the month.

Meanwhile, Qantas (ASX: QAN) shares have rocketed higher this week after the airline confirmed it is on track for a bumper H1 FY23. Citing strong demand for travel, with both business and leisure travel revenue exceeding pre-pandemic levels, the company expects underlying profit before tax will be between $1.2 billion to $1.3 billion for the first half of FY23. 

The results are in direct contrast with the same period over recent years, where billions of dollars in losses have mounted. Another positive for the stock was news that debt may come in below target, somewhere between $3.2 billion and $3.4 billion.

Family connectivity app Life360 (ASX: 360) has been charging higher over recent trading sessions, and it continues a run of good form for the stock, which also rallied strongly last week. The company recently received broker coverage from Goldman Sachs, which slapped a $7.50 price target on the stock anticipating its plans to integrate Tile within its core app will be favourable in what is typically its strongest quarter of the year. The broker expects the move will allow the company to reach a volume and pricing inflection point, with predictions of being cash flow breakeven in FY23.Coal stocks have had a standout year so far, and this week it is Coronado Global Resources (ASX: CRN) that has been in the spotlight. News emerged yesterday that the company is discussing a potential takeover deal with US-listed coal miner Peabody Energy (NYSE: BTU), where a merger between the duo could lead to a combined entity worth upwards of $9 billion.This week has also seen strong gains for Perpetual (ASX: PPT), Domino Pizza (ASX: DMP), Dalrymple Bay Infrastructure (ASX: DBI), and Downer EDI (ASX: DOW).

Which shares dragged on the market?

Shareholders in building services contractor Johns Lyng Group (ASX: JLG) have had to navigate a tricky period, with the company bruised earlier in the week following news its CEO sold a large stake in the company. The company leader, Scott Didier, offloaded 4 million shares worth an estimated $25 million, which concerned onlookers. 

However, it is worth noting that Mr Didier still owns more than 49 million shares in the company following the sale, indicating significant commitment towards its future. Nonetheless, the sale overshadowed what was also a positive trading update for the firm, with FY23 revenue expected to surge more than 25% to top $1 billion, and EBITDA tipped to grow 43% to $105.3 million.

Health insurance fund NIB Holding (ASX: NHF) has had to deal with the fallout of its recent capital raise, and that has put its shares under pressure. The company completed a $135 million institutional placement at $6.90 per share, and as it so happens, its shares quickly retreated below that level. A further $15 million will be sought from retail shareholders via a non-underwritten share purchase plan. Proceeds from the capital raise will be used by NIB to complete an acquisition and enter the National Disability Insurance Scheme sector.Some of the other stocks that have lost ground over recent days, despite a strong end to the week for the local share market include Calix (ASX: CXL), Codan (ASX: CDA), Imugene (ASX: IMU), as well as battery metals pair Ioneer (ASX: INR) and Vulcan Energy Resources (ASX: VUL).

We'll be back next week with another Weekly ASX Trading Wrap Up - until then, have a great week!