The Australian sharemarket has regained its mojo today, defying a general weakness in the resource sector.
The market got off to a weak start to the session in what looked set to be another day in the red. Oil prices plummeted to their lowest levels in six months, while there is a general bearishness regarding the future of various other commodities, including iron ore and copper. These concerns have taken a toll on companies such as BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO), as well as Woodside Petroleum Limited (ASX: WPL) and Santos Ltd (ASX: STO).
However, the bulls soon fought back with the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) climbing 0.6% to trade at a near two-week high of 5,714 points shortly after noon.
The market's optimism can likely be attributed to a number of factors, including stronger-than-expected retail sales in June.
Data released by the Australian Bureau of Statistics this morning showed that the seasonally-adjusted growth in retail turnover was 0.7% compared to the previous month, which compares to 0.4% in May and analysts' expectations of 0.4% as well, according to the Fairfax press. The result is certainly encouraging for local investors, although it is also likely to weigh on the Reserve Bank of Australia's decision on interest rates this afternoon, where it is widely expected to leave them unchanged.
Australia's healthcare sector is also providing plenty of drive for the market today with the S&P/ASX 200 Health Care (Index: ^AXHJ) (ASX: XHJ) up 1.2%. CSL Limited (ASX: CSL) of course is the biggest story with its shares charging 1.7% higher to beyond the $100 mark, while Ramsay Health Care Limited (ASX: RHC) and Healthscope Ltd (ASX: HSO) are also up 1.9% and 1.1%, respectively.
Elsewhere, each of the nation's Big Four banks have risen between 0.4% and 0.9%, while Telstra Corporation Ltd (ASX: TLS) and Woolworths Limited (ASX: WOW) are up 0.9% each.
Despite the strong gains recognised today, there is still a level of uncertainty weighing on the market related to corporate earnings season, which kicked off yesterday, combined with Chinese growth prospects and sluggish economic forecasts locally. While that is an issue for short-term traders, long-term investors could certainly look to take advantage of the market's hesitation to load up on some great companies trading at very reasonable prices.
