After a period in which bank stocks continued to rise on a scale comparable to the “buy bank stocks when rates rise” trade, signs of a shift in momentum have begun to emerge. Markets are increasingly focused on the risk that expectations for rate hikes could reverse, while the factors driving bank stocks are being reassessed.
The go-to trade of “buy bank stocks when rates rise” had become widespread among investors, but signs of change have begun to emerge in the assumptions underpinning it. While expectations that bank stocks could rise as much as AI stocks have spread through the market, attention is beginning to focus on the risk that rate-hike expectations could reverse.
In the Tokyo stock market on the 14th, the Nikkei Stock Average fell for a second straight session, ending at ¥63,492, down ¥518 from the previous weekend. The performance of major stocks was reported to have weighed on the market as a whole.
On the same day, SoftBank Group shares fell 10.7%, reportedly dragging the Nikkei Stock Average down by as much as ¥563 on their own. Factors such as a slowdown in AI development were cited as potentially affecting market sentiment.