After 18 months of pain for big bank investors today has finally brought some relief to owners of the most widely-held shares on the S&P/ ASX200 (ASX: XJO). It's all on the back of a relief rally after the Hayne Royal Commission into Financial Services and Banking failed to deliver much in the way of adverse recommendations to the big banks' business models.
Let's take a look at the big bank scoreboard below to see just how big the gains are:
- The Commonwealth Bank of Australia (ASX: CBA) share price is up 4.5% to $73.48
- The Westpac Banking Corp (ASX: WBC) share price is up 7.2% to $26.67
- The National Australia Bank Ltd (ASX: NAB) share price is up 4% to $24.98
- The Australia & New Zealand Banking Group (ASX: ANZ) share price is up 6.7% to $26.92
- The Bank of Queensland Limited (ASX: BOQ) share price is up 2.24% to $10.50
- The Macquarie Group Ltd (ASX: MQG) share price is up 2.6% to $120
The banks have helped lift the S&P/ ASX200 up 2.47% for its best one-day performance in more than a year, with many mum and dad investors who own bank shares likely to be benefiting today.
In fact your average Australian's superannuation balance is also probably benefiting for the huge intraday moves in the likes of Westpac and ANZ Bank shares.
Some of the big moves today may also be the result of a short squeeze whereby recent short sellers of the banks choose to buy back shares and close out positions in disappointment at the lack of a knockout blow from the Royal Commission.
What the future brings is uncertain for bank investors as they still face a number of headwinds including falling house prices, separate regulatory investigations and rising wholesale funding costs putting pressure on their net interest margins. As such it might not be time to pop the champagne corks just yet.
