The Australian sharemarket is trading just 0.2% lower just before 2pm (Sydney time) in what has been yet another rollercoaster ride for investors to stomach.
The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) fell as much as 1.6% earlier in the session, bottoming out at a six-month low of 5383 points as investors tried to process a brutal 10% fall in the price of iron ore overnight.
At the same time, investors are still concerned about the situation unfolding in Greece – whether or not the embattled European nation leaves the Eurozone remains to be seen – as well as the turmoil being experienced on Chinese equity markets with the government unable to regain control over the situation. It is unclear whether the crisis will spill over into China's real economy, and whether that could impact Australia's economy.
Regardless investors would be justified in assuming the iron ore miners would be poleaxed today. Instead, BHP Billiton Limited (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) have all risen in price (1.1%, 0.8% and 3.3%, respectively), as have junior miners Mount Gibson Iron Limited (ASX: MGX) and BC Iron Limited (ASX: BCI).
It's possible that some investors believe that following 10 straight sessions in the red iron ore has been oversold and are positioning their portfolios to benefit from a sudden rebound. That would seem like a questionable move considering the long-term forecasts for the commodity, but it's entirely possible nonetheless.
On the other hand, the Big Four banks fell hard earlier in the session and have only managed to regain some of their losses. Commonwealth Bank of Australia (ASX: CBA) and National Australia Bank Ltd. (ASX: NAB) both remain 0.5% in the red, while Australia and New Zealand Banking Group (ASX: ANZ) and Westpac Banking Corp (ASX: WBC) have fallen 0.1% and 0.9% respectively.
As it is, it really seems as though there is just so much news and uncertainty in the markets right now that investors don't seem to know what to react to. While now could be a great time to start buying some heavily discounted shares, investors also need to be prepared for more turmoil in the near future.
