Local investors are enjoying some strong gains today with the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) rebounding 1.3% from yesterday's lows to be hovering around the 5370 point mark.
The Australian sharemarket has been stuck in a rut recently caused by a mass sell-off of the Big Four banks (largely as a result of their combined $16 billion capital raising and signs of rising bad debts). A severe devaluation of the Chinese yuan and a major fall endured by its stock market has also weighed on the sentiment of Australian investors, as has the commodities downturn.
However, the same companies that have caused its setback in recent months are the ones driving it higher today. The banks are performing particularly strongly with Commonwealth Bank of Australia (ASX: CBA) recovering from yesterday's 5.4% decline to trade 1.5% higher.
The bank's three major rivals are faring even better with Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd. (ASX: NAB) and Australia and New Zealand Banking Group (ASX: ANZ) up an impressive 3.2%, 2.6% and 2%, respectively.
Although the banks are providing the most drive, the gains certainly haven't been restricted to the financial sector. Elsewhere, Telstra Corporation Ltd (ASX: TLS) has risen 1.2%, while Woolworths Limited (ASX: WOW) and Wesfarmers Ltd (ASX: WES) are up 1.5% and 1.6%, respectively.
Treasury Wine Estates Ltd (ASX: TWE) and Origin Energy Ltd (ASX: ORG) are also generating plenty of interest with the pair up 11.8% and 6.2%, while SEEK Limited (ASX: SEK) has been the market's biggest loser, down 12.1% following a disappointing full-year earnings report.
Indeed, today's relief rally is just what the market needed. It's been a tough few weeks, and months, for investors who have had to digest plenty of bad and worrying news in that time.
Although there could still be more volatility to come, the surge today does suggest that investors are recognising the bargains littered all over the ASX and, encouragingly, taking advantage of some of the discounts on offer. As I mentioned yesterday, investors should look at these dips as opportunities rather than threats, as these are the conditions where the real money can be made.
