Why did the NAB share price backtrack 12% in June?

The National Australia Bank Ltd (ASX: NAB) share price fell off a cliff throughout the month of June.

Despite the bank not releasing any announcements, investors offloaded its shares to an 11-month low of $25.43 on 17 June.

For context, NAB shares started the month from 31 May’s market close at $31.26 and ended at $27.39 on 30 June. This represents a decline of around 12% which can be considered sizeable for a blue-chip share in a short time frame.

While NAB shares have since recovered some lost ground, they are still trading 0.88% lower today to $27.49.

What dragged down NAB shares in June?

The NAB share price finished lower than it started last month, dragged down by weakened investor sentiment.

An aggressive rate hike by the Reserve Bank of Australia (RBA) to cool inflation levels spooked the market.

The RBA ramped up the official cash rate by 0.50% to 0.85% on 7 June. This led to NAB shares tumbling 3.25% on the day of the news.

However, the blood-letting didn’t stop there with the bank recording a loss over the next five business days.

In total, NAB shares declined 16.4% from 7 June until 15 June.

And the bank wasn’t the only ASX 200 financial share to suffer.

For context, the Commonwealth Bank of Australia (ASX: CBA) share price dropped 14.21% over the same period while Westpac Banking Corp (ASX: WBC) and Australia and New Zealand Banking Group Ltd (ASX: ANZ) reversed 19.02% and 13.7%, respectively.

Notably, the RBA is meeting today to decide whether it will lift interest rates from the current level.

Most economists are tipping another 0.5% rate hike to 1.35% which will likely have a negative impact on the ASX.

NAB share price summary

Despite heading south last month, the NAB share price is up by 5% over the past 12 months.

The bank’s shares reached a 52-week high of $33.75 in April, before being heavily sold off in the following months.

NAB commands a market capitalisation of roughly $87.8 billion, making it the second-largest bank on the ASX.

The post Why did the NAB share price backtrack 12% in June? appeared first on The Motley Fool Australia.

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More reading

• Why ASX 200 value shares are surviving the sell-off better than growth shares
• The NAB dividend is being paid today. Here’s what you need to know
• June was a terrible month for ASX 200 bank shares. Here’s why
• Why this fundie favours NAB and Westpac shares out of the big four
• 2 excellent ASX dividend shares that analysts rate as buys in July

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. 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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