Australian shares are shooting higher today in a rally led by the nation's biggest miners following a 9.9% rebound in the price of iron ore overnight. The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) is trading 51 points, or 0.9% higher at 5,522 points, after falling to a low of just 5,383 during yesterday's session.
The local market has been battered in recent weeks as a result of ongoing concerns about Greece's 'debt crisis' while the Chinese stock market rout has also had investors on edge. However, China's sharemarket closed significantly higher yesterday which resulted in greater confidence and thus, a surge in the price of iron ore.
BHP Billiton Limited (ASX: BHP) has been one of the biggest winners this morning, as has its rival Rio Tinto Limited (ASX: RIO), with the pair lifting 1.6% each. Fortescue Metals Group Limited (ASX: FMG), which is Australia's third largest miner, also rose 0.8% after hitting a new six-year low during yesterday's session.
The nation's largest banks were also back on the market's agenda. Australia and New Zealand Banking Group (ASX: ANZ), Commonwealth Bank of Australia (ASX: CBA) and National Australia Bank Ltd. (ASX: NAB) all posted marginal gains between 0.5% and 0.8%, while Westpac Banking Corp's (ASX: WBC) gain ballooned out to 1.5%.
Elsewhere, Australia's energy and gas stocks were on fire after oil prices rose nearly 3% overnight, with Senex Energy Ltd (ASX: SXY) and Santos Ltd (ASX: STO) showing particular strength (up 4.6% and 1.9%). Macquarie Group Ltd (ASX: MQG) and Wesfarmers Ltd (ASX: WES) lifted 2.3% and 0.9%, respectively.
Despite today's strong lift, the market is still sitting well below its recent high levels which presents as an opportunity for investors to buy high-quality companies trading at reasonable prices. Investors are certainly taking that opportunity today with a small company named Integrated Research Limited (ASX: IRI), bidding it no less than 13% higher after it provided an upbeat profit guidance this morning.
As shareholders of Integrated Research now know, small cap stocks can mean BIG returns…
