Why a Chinese mega-dam has taken the gloss off CBA's lofty share price
But when bank-watchers scour the world for explanations on why bank shares lagged last month, an enormous hydroelectric dam project in Tibet is one of several factors that do come up.
The reason, according to analysts, is that big ASX investors are constantly tossing up whether to put their money into either of the market's two massive sectors: banks or miners. Which way investors lean between these two sectors can have a big bearing on share prices: if investors prefer miners, the banks tend to lag, and vice versa.
In market jargon, it's referred to as 'rotating' between the two sectors, and it can have a significant impact on share prices, especially for the most highly valued bank, CBA.
It means the price of bank shares can be influenced by things that have little direct bearing on bank's core business, but that matter a lot for miners, such as the strength of China's construction sector, which affects commodity prices.
Some argue that is what has happened in the past month or so, and the launch of an enormous dam on the Yarlung Tsangpo river in Tibet fed into that optimism on commodities.
The underperformance of banks was a key trend in July. Except for ANZ Bank, the other Big Four lagged the ASX 200 index. CBA lost about 4 per cent in the month. Miners had the opposite experience: BHP gained close to 7 per cent in the month.
This was a stark change from the dominant narrative of the past year, in which banks have sharply outperformed miners, much to the frustration of the investment pros who can't fathom why the CBA share price has kept rising.
Now, the CBA share price is more than 8 per cent below its record highs of June and the bank's market value has slipped under the $300 billion milestone, though CBA shares are still up strongly since the start of the year.
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