Despite strong support from the nation’s largest miners, the Australian stock market has continued its woeful run today with the benchmark S&P/ASX 200 (INDEXASX: XJO) plummeting a further 1%. With today’s drop included, the market has now dropped a massive 7.8% since its peak last month.
Just another 2.2% and we’ll officially be in a “technical correction”.
As I warned over the last few months, it has come to pass that Commonwealth Bank of Australia (ASX: CBA) and its banking peers have led the charge downwards.
Until recently, the big four banks were the ‘go-to’ stocks, thanks to their ‘defensive’ natures and generous dividend yields. Now, investors are focusing on the risks facing the industry and the excessive share prices and selling them down en masse.
Commonwealth Bank has today dropped $1.01 or 1.3% and is trading at just $75.16. Although it might seem far more compelling now than when it was trading near $84 recently, investors still ought to steer clear as I think there could be more pain in store. The same goes for Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd. (ASX: NAB) and Australia and New Zealand Banking Group (ASX: ANZ), all of which are down between 1.6% and 2.1% today.
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