What Happened to Australia and New Zealand Banking Group Ltd’s Share Price?
Shares in Australia’s third-biggest bank, Australia and New Zealand Banking Group Ltd [ASX:ANZ], rose by 1.65% today in a welcome positive session on the Aussie stock market.
At $31.43, ANZ shares have bounced well off last week’s six-month low…but are still down 10% from April’s all-time high.
The bounce may reassure share investors who bought ANZ over the past year expecting reliable yield and capital growth.
Why Did This Happen to ANZ Shares?
When the share price of one of Australia’s big four banks moves, the other three tend to move in a similar direction.
The market has bid up the price of all four big banks today…so in a broad sense, the price action shows that investors are viewing the recent downturn in bank stocks as overplayed.
Free Reports:
Get Our Free Metatrader 4 Indicators - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter
Get our Weekly Commitment of Traders Reports - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.
It goes to show how quickly a short-term correction can reverse to the upside.
Plenty of pundits insist that bank stocks can’t cope if and when central banks slow down or stop pumping so much money into the economy.
That view has weighed on all four big Aussie bank stocks lately…but the extent of the selloff has looked unfairly harsh.
ANZ’s larger exposure to the Asian markets means it should outperform in times of benign economic growth…and suffer more when the market hits patches of risk aversion. That outsized exposure seems to be why the ANZ share price has outperformed its peers and the market today.
What Now for Australia and New Zealand Banking Group Ltd?
Much like its three fellow pillars of the Aussie banking system, ANZ has enjoyed a fantastic share price run over the past two years.
That reflects more than just a ‘rising tide’ of stock market bullishness. ANZ’s profits are ramping up thanks to a well-planned strategy for domestic and international growth.
The best time to buy bank stocks is when fear and uncertainty overwhelm the market. That’s why anywhere north of the $30 level ANZ shares broached back in February, I’d view this big dividend-paying stock as too cheap to ignore.
Cheers, Tim Dohrmann+
Small-Cap Analyst, Australian Small-Cap Investigator
Join Money Morning on Google+
The post Why the ANZ Banking Group Ltd Share Price Bounced Today appeared first on Stock Market News, Finance and Investments | Money Morning Australia.
