Commonwealth Bank of Australia (ASX: CBA) shares have continued to act as a drag on the broader S&P/ASX 200 (INDEXASX: XJO) today with the stock trending 97 cents or 1.3% lower late in the session.
Now trading at $74.80, the shares have lost nearly 11% of their value since reaching an all-time high back in July, while they have declined by 3.9% since the beginning of the calendar year.
Here are three reasons why the bank's shares might be trading lower today…
- Limit the losses. It seems investors may have finally switched onto just how expensive the bank's shares actually were. Even at today's depressed price the stock is still overvalued, so investors may be taking their money off the table before the shares fall any further.
- Global Growth. Equity markets around the world are plunging after the International Monetary Fund cut its 2015 world growth outlook for the third time this year. Investor sentiment may have been further impacted by the IMF's warnings that the dangers posed by tensions in the Middle East and Ukraine should not be underestimated.
- Yields. While it is widely expected the RBA will leave interest rates unchanged until the end of the year, speculation is rising that they could increase them in the first half of 2015. Given the banks' enormous yields have been the main attraction to the stocks, such a move could trigger even more selling.
