A weak lead set by Wall Street overnight indicated Australian investors could be in for more pain today, but the local bourse has managed to buck the trend to snap a five-day losing streak.
After having lost almost 3.5% over the last five trading days, the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has returned to the black in fine form, lifting 0.8% to be trading at 5,667 points ahead of tonight's Federal Budget.
Although some economists believe the budget deficit for 2015/16 will balloon out to more than $40 billion, the government has promised that the budget to be delivered tonight won't be as painful as last year's. As Bruce Jackson, General Manager of The Motley Fool Australia highlighted yesterday, Tony Abbott has previously stated that people will find the budget "pretty dull, pretty routine", with few major shakeups expected.
Back to the ASX though, and it's Qantas Airways Limited (ASX: QAN) doing a lot of the heavy lifting today. Qantas' shares have soared almost 10% to a near seven-year high of $3.65 after the airliner said it was in a position to pay down $1 billion of debt by June 30, thanks largely to improved performance on domestic routes, lower fuel costs and big cost reductions. The shares have skyrocketed a remarkable 236% since the beginning of 2014.
Three of the Big Four banks are also driving the ASX higher after having all fallen into a "technical correction" recently. Although many analysts believe there could be more pain in store for the stocks, investors appear willing to take that chance with Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC) and Australia and New Zealand Banking Group (ASX: ANZ) rising 0.8%, 1.7% and 1.6% respectively.
Elsewhere, a strong surge in the iron ore price overnight has provided plenty of energy for mining heavyweights BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO), with the pair up 1.8% and 0.6% respectively. The commodity has now risen 35% in just over a month and investors are clearly becoming more confident that the rally can be sustained.
While today's jump has certainly provided investors with an opportunity to catch their breaths following what has been an agonising run recently, investors need to ensure they are prepared for whatever might come next.
