The Australian sharemarket has managed to regain some composure today after what was the S&P/ASX 200's (Index: ^AXJO) (ASX: XJO) worst single day performance in more than three years on Friday.
In a rout led by the Big Four banks, the benchmark index plummeted 2.4% in the final session and nearly 4% for the entire week as investors reacted to a major capital raising by Australia and New Zealand Banking Group (ASX: ANZ). The benchmark index has managed to regain 0.5% today however, with ANZ recovering 1.4% while Westpac Banking Corp (ASX: WBC) is up 0.9% so far.
Commonwealth Bank of Australia (ASX: CBA) and National Australia Bank Ltd. (ASX: NAB) have also risen strongly, recording gains of 1.4% and 1.2% respectively. Commonwealth Bank is up after it said that it was yet to make a decision regarding a much-speculated capital raising, while NAB reported a reasonable, but not spectacular quarterly result.
Speaking of earnings results, there have been some huge movements in some of Australia's other corporations which are pulling the market in different directions. JB Hi-Fi Limited (ASX: JBH) smashed its revenue and earnings expectations with the stock lifting 10% just before 1:00pm (Sydney time) – a result which has also pulled Harvey Norman Holdings Limited (ASX: HVN) 3.8% higher – while Ansell Limited (ASX: ANN) has plunged more than 20% on a poor earnings outlook.
Elsewhere, Orica Ltd (ASX: ORI) has recovered 1.2% after last week's smashing, while Rio Tinto Limited (ASX: RIO), Telstra Corporation Ltd (ASX: TLS) and Woolworths Limited (ASX: WOW) are up 1.2%, 1% and 0.7%, respectively.
Unless you've got nerves of steel, a major sell-off like the one experienced on Friday can be enough to turn even the most experienced investors away from the market. While that might be the case however, such instances can also open up incredible buying opportunities, as some of the smartest investors are likely realising today.
What investors need to remember is that successful investing is all about getting your emotions in check and being willing to ride out the good times, and the bad. With the market now hovering just above the 5,500 point mark, now could be an excellent time to begin buying some high-quality companies trading at reasonable prices.
