The Australian sharemarket has edged higher today as investors continue to process the strong gains that were achieved across the board last week. The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has risen just over 0.2%, buoyed by the Big Four banks despite an increase in regulation announced by APRA.
In an announcement this morning, the Australian Prudential Regulation Authority, or APRA, said that the big four banks, and Macquarie Group Ltd (ASX: MQG), would be required to hold billions of dollars in extra capital. Although the costs will almost certainly be passed on to customers and shareholders, the changes were mostly expected and were possibly more lenient than that market had anticipated.
As a result, all of the five banks have risen in price with Australia and New Zealand Banking Group (ASX: ANZ) and Macquarie leading the way, jumping 1.2% and 2.1% respectively. Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd. (ASX: NAB) and Westpac Banking Corp (ASX: WBC) rose between 0.1% and 0.4% each.
Elsewhere, a heavy slide in the gold price is likely weighing on the market's sentiment with the shiny metal experiencing what the Fairfax press described as being 'akin to a flash crash'. Gold plunged more than 4%, falling below the US$1,100 an ounce threshold with companies like Newcrest Mining Limited (ASX: NCM), EVOLUTION FPO (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) wearing the full brunt of it. The trio fell 9%, 14.4% and 8.9%, respectively.
Investors might look at the market's performance today and decide that conditions remain too uncertain to start buying shares, preferring to wait for further clarification to be provided by the market. The problem is, by the time that happens, shares in quality companies will be considerably more expensive than they are today, costing those investors some impressive gains.
Although it is impossible to predict with any certainty what the market will do tomorrow, next week or even this afternoon, now certainly appears to be a great time to buy some beaten-down stocks before all the big gains are recognised.
The smart money is looking for up-and-coming smaller companies with huge potential