Investors who treaded water while other swimmers frantically headed for shore during the recent selloff have been well rewarded with the local sharemarket climbing strongly for the second day in a row.
Shortly after noon, the benchmark S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) was trading 53 points or 1% higher at 5,630 points which follows on from yesterday's 1.9% gain. It also follows another solid night for international equity markets as investors continue to breathe a sigh of relief after Greece finally agreed to a new deal with its international creditors which will hopefully see it avoid leaving the Eurozone (for now at least).
Investors have also responded warmly to economic data that has emerged from China early this afternoon. Annual growth, measured by gross domestic product (GDP) rose 7% during the second-quarter (year over year), which was ahead of the 6.8% forecast by most economists. According to Fairfax, industrial production was 6.8%, while retail sales rose 10.6% compared to forecasts of 6% and 10.2%, respectively.
The gains were widespread throughout the sharemarket, although it was the nation's largest banks that did a lot of the heavy lifting with Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC) and National Australia Bank Ltd. (ASX: NAB) gaining 1.1% each. Australia and New Zealand Banking Group (ASX: ANZ) rose a more modest 0.5%.
Meanwhile, Woolworths Limited (ASX: WOW) and Wesfarmers Ltd (ASX: WES) jumped 2% and 1.9% respectively, despite weak numbers from the Westpac-Melbourne Institute of consumer sentiment index, while CSL Limited (ASX: CSL) also gained 1.8%. The biopharmaceutical giant now trades at $93.86 and could be on its way to breaching the $100 per share mark.
Unforuntately, BHP Billiton Limited (ASX: BHP) bucked the trend, falling 1.1% and acting as a weight on the broader market's overall returns. In a market sensitive announcement this morning, BHP said it expects to write down the value of its onshore US petroleum business by roughly US$2 billion as a result of the headwinds currently facing the industry.
BHP as an aside, although there is no way of knowing what the market will do tomorrow or even next week, it seems as though investors are waking up to the bargains that are currently presenting themselves on the ASX.
If you haven't already, now could be an excellent time to start loading up on some heavily discounted companies.
