Australia's major banks have staged a minor comeback after yesterday's shock drop which drove the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) to its largest one-day loss in over a month.
The index plunged 69.7 points or 1.3% on Monday amidst fears that the tech stock sell-off could spread to other sectors of the market. While a number of Australia's largest corporations succumbed to the market's fears, it was the big banks which fell the hardest due to their hefty valuations.
Commonwealth Bank of Australia (ASX: CBA) dropped 1.1% with its shares closing at $76.51 while National Australia Bank Ltd (ASX: NAB) lost 1.3%. Australia and New Zealand Banking Group (ASX: ANZ) and Westpac Banking Corp (ASX: WBC) both lost 1.5%. Today they have each gained between 0.4% and 0.7%.
Supermarket operators Woolworths Limited (ASX: WOW) and Wesfarmers Ltd (ASX: WES) have also recovered after yesterday's losses with shares rising 1.1% and 0.9% today respectively.
Foolish takeaway
Each of the big four banks are trading well-above their long-term average P/E ratio following on from last year's rallies. Although they are each amongst Australia's strongest and 'safest' corporations, their shares are overpriced and you would be wise to consider other more attractive alternatives.
