The S&P/ASX 200 Index (ASX: XJO) is having a pretty stellar day of trading this Tuesday so far. At the time of writing, the ASX 200 is up a healthy 0.98% at 7,310 points. For the ASX 200 to have such a robust gain usually means one thing — ASX 200 bank shares are having a good time of it.
That's because the big four ASX banks, along with Macquarie Group Ltd (ASX: MQG), make up 5 of the top 7 ASX 200 shares by market capitalisation and therefore weighting. And it is proving a strong day for the ASX banks, with two notable exceptions.
The ASX 200's largest company, Commonwealth Bank of Australia (ASX: CBA), is currently down slightly by 0.13% at $93.65 a share after rising as high as $94.99 earlier today.
Westpac Banking Corp (ASX: WBC) is also down, by 0.5% at $20.81, after going as high as $21.27 this morning.
Australia and New Zealand Banking Group Ltd (ASX: ANZ) shares are currently up a very pleasing 1.65% at $27.06 a share.
And National Australia Bank Ltd (ASX: NAB) is presently up 1.05% at $27.48 a share.
Macquarie, which briefly overtook ANZ as the ASX 200's fourth-largest bank earlier this month, is up 2.14% at $198.16.
So why are some ASX 200 bank shares having such a good day?
ASX 200 bank shares lead share market recovery
Well, we don't know for sure. But we do know that ASX 200 financials shares are still one of the best performing sectors on the ASX 200 so far this Tuesday.
It's possible these gains are the direct result of the losses ASX financials such as the banks took on Monday. Yesterday's trading day saw the ASX 200 lose 0.4% by the closing bell, with the banks all going backwards by varying degrees. ANZ was the biggest loser, falling 1.6%.
Financial shares like the banks are notoriously cyclical and volatile, often exceeding the market's gains or losses when either occurs. Take last year. When the COVID-induced crash hit the ASX boards, the ASX 200 lost around 33% peak-to-trough.
But the NAB share price was down by roughly 45% over the same period. NAB's subsequent share price recovery was even more dramatic than the ASX 200's. We could just be seeing this dynamic playing out yesterday and today on a far smaller scale with NAB and ANZ.
Out of CBA, NAB, Westpac, and ANZ, Westpac is currently leading the ASX 200 banks' income potential, with its dividend yield of 5.67% on today's share pricing.
