A sharp rebound on the Australian sharemarket this morning was short-lived with the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) once again trading in the red this afternoon.
The local bourse jumped by as much as 1.1% to 5,698 points early in the session thanks to a positive lead set by the US equity markets on Friday night, together with a third interest rate cut in China in the space of six months in an attempt to bolster its economic growth. Unfortunately, the market's good mood only lasted so long with the ASX 200 now hovering 0.2% down at 5,625 points.
The nation's high-yield dividend stocks were again the culprit behind the market's retreat as investors continue to pile out of the stocks they are now recognising as significantly overvalued.
While National Australia Bank Ltd. (ASX: NAB) has remained in a trading halt (until Tuesday), each of its major rivals have fallen heavily, extending on their massive losses from last week. Commonwealth Bank of Australia (ASX: CBA) has lost another 0.7% to be trading at just $82.04, while Australia and New Zealand Banking Group (ASX: ANZ) and Westpac Banking Corp (ASX: WBC) have both dropped 1.2%.
Telstra Corporation Ltd (ASX: TLS) has delivered an even worse performance. Its shares have fallen 1.8% to just $6.06 which is its lowest price since 13 January this year. It's down 10% since early February having underperformed the market in that time.
Australia's largest iron ore miners are providing some energy for the market, although not enough to push it back into the black for the session. BHP Billiton Limited (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG) have lifted 1.6% and 3.6% respectively, after the iron ore price rallied another 1.7% overnight.
After having threatened to break through the 6,000 point barrier for the first time since 2008 just a fortnight ago, the local share market has now recorded a loss in eight of the last 10 sessions, having fallen a total 5.9% in that time. At the same time, each of the banks find themselves in a "technical correction", having lost more than 10% since their respective peaks and investors are worried that this could be the beginning of something much more sinister.
