The Australian sharemarket has defied a weak lead set by international equity markets on Friday, kicking the week off in fine fashion. Just after 1:00pm (Sydney time), the benchmark S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) was trading more than 64 points, or 1.1% higher at 5,729 points.
While Telstra Corporation Ltd (ASX: TLS) has managed to lift 1.3% to trade at $6.28, it is the banks doing most of the heavy lifting. Despite the strong headwinds facing the Big Four, including regulatory pressures and concerns over their ability to keep lifting dividends, investors are still trying to squeeze as much as possible out of the stocks. The falling Australian dollar may also be providing investors with greater confidence.
After a weak start, Commonwealth Bank of Australia (ASX: CBA) has managed to lift by 1.3%, followed by Australia and New Zealand Banking Group (ASX: ANZ) which has gained 1.2%. Meanwhile, National Australia Bank Ltd. (ASX: NAB) and Westpac Banking Corp (ASX: WBC) have risen 0.8% and 0.9% respectively.
Australia's miners are also performing strongly today after the iron ore price rallied 3.5% to finish just under US$60 a tonne, according to the Metal Bulletin, defying analysts' expectations of a heavy fall. Fortescue Metals Group Limited (ASX: FMG) is amongst the biggest beneficiaries for the day, up 4%, while BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO) rose 0.9% and 1.7% respectively.
Although the immediate outlook for the Australian sharemarket remains unclear, now could be an excellent time to start buying. With the ASX 200 trading well below its recent highs, volatility appears to have subsided and the ASX could be preparing for another upwards charge. This could certainly be led by companies offering generous dividend yields given the current low interest rate environment.