Commonwealth Bank of Australia (ASX: CBA) has managed to find some flare today and is doing its best to avoid slipping into an official bear market.
Each of Australia's largest banks have come under enormous selling pressure in recent weeks, with Westpac Banking Corp (ASX: WBC) falling by more than 20% from its peak. Commonwealth Bank, National Australia Bank Ltd. (ASX: NAB) and Australia and New Zealand Banking Group (ASX: ANZ) have seen big declines, with the group losing a combined $90 billion in market value since March / April.
But all four have come out firing today as investors have piled back into the stocks, possibly thanks to the strong jobs data released earlier or the fact that the Reserve Bank of New Zealand cut interest rates for the first time in four years earlier.
Commonwealth Bank of Australia, which is Australia's largest bank, rose 1.8% to trade at $81.38 while Westpac, ANZ and NAB have also risen between 1.7% and 1.9%. That compares to a 1.4% gain for the benchmark S&P/ASX 200 (Index: ^AXJO) (ASX: XJO).
Although the stocks might seem attractive at their heavily discounted prices, investors need to remain wary of the headwinds facing the sector, and the Australian economy as a whole. While there is certainly scope for a recovery for the banks in the near-term, they stand little chance of delivering market-beating returns in the long run from their current prices, making them stocks for 'Foolish' investors to avoid.
