Commonwealth Bank of Australia (ASX: CBA) has been the driving force behind today's stock market rally.
Its shares have surged $1.91, or 2.6% higher to trade at $75.33, compared to a 1.6% rise for the benchmark S&P/ASX 200 (Index: ^AXJO) (ASX: XJO), and gains of between 2.4% and 2.6% for each of its Big Four rivals.
It seems the most likely reason behind the bank's rally is the strong rebound in global equity markets overnight, combined with a marginal improvement on China's stock market today.
Given the lofty valuations attributed to each of the Big Four bank stocks, all four have been sold down heavily in recent weeks as investors begin to question the health of the local share market, and the economy as a whole. As such, it's no surprise the banks have jumped on signs of a rebound.
However, investors shouldn't be too quick to jump back into the bank sector. Despite their recent selloffs, all four remain somewhat expensive and could struggle to generate market-beating returns over the long-run. In my opinion, investors would be better off exploring some of the many other alternatives currently on offer.
