S&P/ASX 200 Index (ASX: XJO) financial shares are among 10 of 11 market sectors in the red on Thursday.
The only sector doing well today is energy, up 2.5%, indicating the market's pessimism due to the ongoing global oil shock.
The International Monetary Fund (IMF) has warned of a global recession given the long-tail impact of energy shocks.
Higher energy prices and supply constraints feed through to all corners of modern economies, including grocery prices.
This has sparked fears of higher inflation and the prospect of several more interest rate rises in Australia this year.
The market is already pricing in a 72% chance of an interest rate rise after the next Reserve Bank board meeting on 5 May.
Federal Treasurer Jim Chalmers says it's a dangerous time for the world economy, as he continues to work on the May Budget.
Dr Chalmers said (courtesy Australian Financial Review):
The IMF's World Economic Outlook shows it's a dangerous moment for the global economy.
The world is expecting slower growth, higher inflation, and extreme volatility arising out of the conflict in the Middle East, and we are, too.
Both Chalmers and Prime Minister Anthony Albanese continue to signal reform in the upcoming Budget, to be unveiled on 12 May.
Reform may include cuts to the capital gains discount for property investors and changes to negative gearing.
The Australian property market, which the ASX 200 banks are heavily leveraged to, is already cooling following two rate rises this year.
Additionally, consumer confidence has plummeted.
This month, the Westpac-Melbourne Institute Consumer Sentiment Index recorded its biggest fall since the start of the pandemic in 2020.
ASX 200 financial shares are down 2.5% over six months, and up 2.1% in the year to date (YTD).
This compares to a 2.9% fall over six months for the benchmark index, and just an 0.5% gain in the YTD.
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Experts call time on 3 ASX 200 financial shares
Amid all this economic upheaval, experts have slapped sell ratings on three ASX 200 financial shares.
Commonwealth Bank of Australia (ASX: CBA)
The CBA share price is $173.78, down 0.7% today, and up 7.9% in the YTD.
Dylan Evans from Catapult Wealth has a sell rating on CBA shares.
Evans said (courtesy The Bull):
CBA is a high quality company, with a strong management team and consistent track record.
However, in our view, the bank was recently trading on a lofty price-earnings ratio well above its long term average and that of its competitors. This multiple expansion has driven much of CBA's share price outperformance in the past five years.
However, the company's high multiple is supported by only single digit growth and a recent modest dividend yield below 3 per cent on April 16.
Bendigo and Adelaide Bank Ltd (ASX: BEN)
The Bendigo Bank share price is $10.56, down 0.5% today, and down 0.5% in the YTD.
Christopher Watt from Bell Potter has a sell rating on this ASX 200 financial share, explaining:
The market responded positively to the company's third quarter trading update for fiscal year 2026.
Unaudited cash earnings were up 7.6 per cent on the first half quarterly average. The net interest margin of 1.98 per cent was up 6 basis points on the second quarter of 2026.
In our view, catalysts to drive improvement from here are limited.
The risk-reward profile lags other peers, so we would be inclined to cash in gains in this volatile environment.
ASX Ltd (ASX: ASX)
The ASX share price is $58.92, down 0.5% today, and up 14.6% in the YTD.
ASX is the predominant stock market operator in Australia.
Watt also has a sell rating on this ASX 200 financial share, stating:
The ASX appears challenged, in our opinion, with structural pressures emerging across its core listings and trading businesses.
Our research indicates limited growth in listings activity and ongoing scrutiny around system reliability may weigh on investor confidence.
While the ASX benefits from monopoly-like characteristics, its earnings growth profile is moderating, in our view, and regulatory risk remains elevated.
At current valuation levels, the risk-reward equation looks unfavourable relative to other opportunities in the market.
