Westpac share price slides again and is now down 12% this week

Westpac’s shares are down 12% this week…

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The Westpac Banking Corp (ASX: WBC) share price has continued its slide on Thursday.

In afternoon trade, the banking giant’s shares are down a further 4% to $21.00.

This means the Westpac share price is now down over 12% this week.

Why is the Westpac share price sinking?

Investors have been selling bank shares this week amid concerns over the Reserve Bank of Australia’s aggressive rate hikes.

There are fears that a quick and aggressive tightening cycle could create challenges for the major banks from more expensive wholesale funding, a weaker housing market, and a greater risk of a recession. Whereas a gradual and measured tightening cycle was expected to be more manageable for the banks and the economy.

Also weighing on the Westpac share price today is news that UBS has downgraded its shares.

According to the note, the broker has downgraded the bank’s shares to a neutral rating and cut the price target on them to $26.00.

UBS highlights that bank shares have traditionally underperformed the market during periods of high inflation and low growth.

Though, it is worth noting that the broker’s price target still implies material upside for investors, so it isn’t all bad news for them.

Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Westpac Banking Corporation. 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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