AUS
NZ
UK
CA
USA
IND
Highlights
- US Federal Reserves cash rate decision has been the major market influencer today (16 June).
- Financials, specifically big four bank shares, were trading low as of noon, while showing mixed signs of recovery in the second half.
The US Federal Reserve lifted its official interest rate by 0.75 percentage point on Tuesday night (June 15) in order to combat the highest inflation in four decades. Wall street stocks rallied cheering the move. The ASX futures were up 0.3% at around 6.30 AM AEST today. The local share market index ASX200 was up 0.37% by 11:39 AM AEST.
However, as per Fed’s chair Jerome Powell, taming the US inflation is not going to be easy and another rate hike could be expected in July. It is to be noted that the ASX is not immune to the weaknesses of Wall Street and the Australian stock market is already facing worries of uncomfortably high inflation and likely aggressive RBA rates hike in coming months.
Though the ASX cheered the rate hike decision by US Fed, the ASX 200 financials sector index (XFJ) was still trading in red territory during intraday trading session. The sub-sector ASX 200 banks index (XBK) is down 0.642%. In this backdrop, let us look at how the Australian ‘Big’ four banks National Australia Bank Ltd (ASX:NAB), Commonwealth Bank of Australia (ASX:CBA), Westpac Banking Corporation (ASX:WBC) and Australia and New Zealand Banking Group Ltd (ASX:ANZ) performed today at the ASX.
Commonwealth Bank of Australia (ASX:CBA)
The largest of the big four in terms of market cap, Commonwealth Bank of Australia has slipped 0.10% by noon today. While the share price has remained on a losing streak in the near term, today’s market sentiment has pushed the share price further below. However, CBA has post noon declared dividends and the share price appears to have reversed the morning losses a bit. As of date, the annual dividend yield on CBA shares is around 4.13%
Share price performance of Big four banks as on Thursday noon
Image Source © 2022 Kalkine Media ®
Among the big four Australian banks, ANZ appears to have the lowest PE ratio, while the highest is of CBA. In terms of price performance in the last thirty days WBC has lost maximum amongst the four while CBA is much better than others. On a YTD basis, the biggest loser is ANZ.
Westpac Banking Corporation (ASX:WBC)
As of noon today, the Westpac Banking Corporation’s share price is down 1.57% on previous close. WBC share price has dipped almost 10.44% in the last five days. As of 10 June 2022, the company had revealed its considerations on issue of a Capital notes offer. However, it was subject to the market conditions in near term.
Australia and New Zealand Banking Group Ltd (ASX:ANZ)
Australia and New Zealand Banking Group Ltd shares appeared to be least impacted by the financial sector blues today. In fact, the ANZ share price has turned green post mid-day. Lacking any new ASX announcements ANZ share price seems to have been impacted by the worries of future rate hikes and inflationary pressure in the first half today. However, ANZ shares appeared to have recovered from the red zone post noon.
National Australia Bank Ltd (ASX:NAB)
Shares of National Australia Bank Ltd were also down about 0.08% by noon today. However, post lunch NAB share price has reversed some of the early losses.
Bottom line
While the US Fed’s rate hikes have been the major market influencer today, in the near term, Australian investors have been worried of inflation and RBA rate hikes. In purview of the RBA’s cash rate decision expected in a few days, a watch on share price of big four banks seems worthy.
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