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The Westpac share price has jumped 6% higher on Tuesday

The Westpac Banking Corp (ASX: WBC) share price has had a stunning start to the day and is notably higher in early trade.

At the time of writing the banking giant’s shares are up 6% to $26.35.

Why is the Westpac share price on fire today?

Investors have returned to the banking sector in their droves this morning following the release of the Royal Commission final report after the market close on Monday.

Although that report contained a total of 76 recommendations, they were all largely within the market’s expectations. This has led to a relief rally today, which has possibly been supported by short sellers closing positions.

It isn’t just Westpac’s shares that are rallying higher today. Here is the state of play in the rest of the sector:

  • The Australia and New Zealand Banking Group (ASX: ANZ) share price is 4% higher at $26.23.
  • The Bank of Queensland Limited (ASX: BOQ) share price has climbed 2% to $10.48.
  • The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price has risen 1% to $11.10.
  • The Commonwealth Bank of Australia (ASX: CBA) share price is up almost 4% to $72.92.
  • The National Australia Bank Ltd (ASX: NAB) share price has pushed 3% higher to $24.74.

The same cannot be said for the Mortgage Choice Limited (ASX: MOC) share price, though. It is down 33% in early trade after the Royal Commission recommended a complete ban on trail commissions and eventually a ban on all mortgage broker commissions.

Should you buy Westpac shares?

With the Royal Commission now finished and the recommendations known, I think the banks are an attractive option for investors. Especially income investors that are on the search of high yielding dividends to beat low interest rates.

While I see Westpac’s shares as a buy, I would sooner buy ANZ or NAB ahead of them due to their favourable exposure to business banking.

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Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of National Australia Bank Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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