It seems that the Australian stock market's record-breaking 12-day rally may finally come to an end today with the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) trading 0.5% or 32 points lower late in the session.
The benchmark index has enjoyed a remarkable run in that time, climbing a total of 9.7% to finish the week trading at 5,820.2 points, in what was its longest rally in history. Meanwhile, it reached a new six-year intraday high, peaking at 5,850.9 points on Friday.
Rebounding commodity prices played a key role in the market's run. After having slipped roughly 60% in the space of seven months, oil rose as much as 20% in just under a week, climbing roughly US$10 a barrel to US$57.80 a barrel today. What's more, one of the industry's biggest experts predicted that prices could rise as high as US$200 a barrel which would have provided the market with a much needed burst of confidence.
Companies like Senex Energy Ltd (ASX: SXY), Santos Ltd (ASX: STO) and BHP Billiton Limited (ASX: BHP) were amongst the biggest beneficiaries – the latter also benefiting from greater stability in the iron ore price, which was also enjoyed by companies such as Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG).
Dividends Galore
While stocks in the commodities sector helped push the market higher; it is clear that the big money has gone into the market's dividend darlings, namely the big four banks and Telstra Corporation Ltd (ASX: TLS), amongst others. The Reserve Bank's decision to slash interest rates to a new record low of 2.25% saw investors flock towards stocks they believe will deliver superior income returns to term deposits or government bonds.
Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC) and Australia and New Zealand Banking Group (ASX: ANZ) all reached new all-time highs, while National Australia Bank Ltd. (ASX: NAB) and Telstra both reached 7 and 14-year highs.
Although the market's 12-day rally appears to be drawing to a close, investors should see this as an opportunity to buy stocks trading at discounted prices. Although the ASX 200 is trading at a multi-year high, there could be plenty more profits to be made over the coming years, provided that you buy the right stocks.
For instance, while the banks and Telstra have surged higher, other high-yield stocks such as Insurance Australia Group Ltd (ASX: IAG) and Woolworths Limited (ASX: WOW) haven't received as much attention, but that could certainly change over the coming weeks or months.
