The bull market is back!
The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) rose another 1.6% this morning, adding to yesterday's 1.7% rise, and rewarding those investors who held on through one of the roughest patches in recent memory. This morning it hit a high of 5,199 points, but has since retreated marginally.
The optimism appears to have come after signs of stability from China's stock market which has played a key role in the selloff of global equities in recent weeks. The Shanghai Composite rose 2.9% yesterday, sparking a world-wide recovery overnight.
In the United States, the Dow Jones lifted 2.4% and the NASDAQ rose 2.7%, with the S&P 500 up 2.5% — its second biggest gain of the year, according to Fairfax. Meanwhile, London's FTSE 100 rose 1.2% and Germany's DAX jumped 1.6%.
In Australia, it was the Big Four banks coming to the rescue. Australia and New Zealand Banking Group (ASX: ANZ) backed up yesterday's 3% rise with another 2.5% increase, while Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd. (ASX: NAB) and Westpac Banking Corp (ASX: WBC) rose 2.9%, 2.1% and 2%, respectively.
Meanwhile, Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) gained 1.9% and 6.1% after a solid session for commodities. BHP Billiton Limited (ASX: BHP) actually fell 1.3% as it went ex-dividend.
The strong gains recorded over the last two days will certainly come as a relief to local investors who have watched the ASX 200 plunge roughly 16% over the last five months. Although it is unclear whether there is more turbulence to come over the coming weeks, now could be a good time to start buying high-quality companies at reasonable prices.
