The Australian sharemarket has managed to break a three-day losing streak with the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) climbing 0.4% higher at 5,815 points, after a somewhat lacklustre morning.
Leading into the session, it was expected that we faced another day of heavy losses after a weak performance from the Dow Jones and NASDAQ indices, both of which fell more than 1% overnight, while the iron ore price also lost further ground, ending the session nearly 1.7% lower at US$56.18 a tonne, according to the Metal Bulletin.
Despite this setback however, Australia's iron ore miners are actually firing on all cylinders, based on fresh signs the major players in the industry could cut back their production rates. Just over a week after BHP Billiton Limited (ASX: BHP) said it would slow its expansion, Brazilian-based Vale also said it was prepared to slow production to improve overall margins – a move which should force the commodity's price higher.
While BHP itself rose 1.9%, Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) also soared 2.4% and 6% respectively. Junior miner BC Iron Limited (ASX: BCI) has lifted 12.1% to be trading at 48.2 cents.
Meanwhile, Australia's big banks were also given the opportunity to catch their breath after suffering from heavy falls over the last week. Although recent media reports are suggesting the banks' profit growth could come under significant pressure, investors are holding onto hopes of an official interest rate cut when the Reserve Bank meets next week.
Westpac Banking Corp (ASX: WBC) and Australia and New Zealand Banking Group (ASX: ANZ) have lifted the most, up 0.7% and 0.6% respectively, while National Australia Bank Ltd. (ASX: NAB) and Commonwealth Bank of Australia (ASX: CBA) have each risen 0.3%.
Unfortunately, today's gains are unlikely to appease the fears of some investors that we could be at the beginning of a significant pullback in share prices.
