S&P/ASX 200 surges on iron ore bull rally: What you need to know

The S&P/ASX 200 (Index:^AXJO) (ASX:XJO) has rallied again today, led by BHP Billiton Limited (ASX:BHP) and Rio Tinto Limited (ASX:RIO).

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The benchmark S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) is climbing higher for the second day in row in a rally led by the miners following a strong session for the commodity markets.

In something of a dramatic turnaround, iron ore returned to a bull market overnight as it rose 4.6% to almost US$56 a tonne. It was only three weeks ago that it was wailing in an official bear market sitting at a multi-year low of just US$44 a tonne. Although it is widely believed that the commodity's strength will be short lived, investors are still trying to enjoy the moment with the iron ore miners posting strong gains for the day so far.

While the response from Fortescue Metals Group Limited (ASX: FMG) has been relatively muted (perhaps because of its strong rebound recently), Rio Tinto Limited (ASX: RIO) and BHP Billiton Limited (ASX: BHP) both gained 2.5% for the session. The move will certainly come as a relief to shareholders who have endured a rough run in recent months.

Australia's oil and gas sector is also generating plenty of energy for the wider market today with companies such as Woodside Petroleum Limited (ASX: WPL) and Oil Search Limited (ASX: OSH) up 2% and 2.2% respectively, while Santos Ltd (ASX: STO) has gained an impressive 4.1%.

All four of Australia's major banks are sitting in the black, with National Australia Bank Ltd. (ASX: NAB) gaining the most with a 0.8% rise, while Woolworths Limited (ASX: WOW) and Wesfarmers Ltd (ASX: WES) have gained 1.7% and 1.1% respectively.

Although the S&P/ASX 200 is edging closer to the 5,700 point mark, it still remains well below the multi-year high levels it achieved earlier this year where it threatened to breach the 6,000 point mark. While it is impossible to predict what the market will do in the near future, you can be sure that there are plenty of compelling opportunities presenting themselves right now – you just need to know where to look!

Motley Fool contributor Ryan Newman has no position in any stocks mentioned. You can follow Ryan on Twitter @ASXvalueinvest. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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