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S&P/ASX 200 explodes: Is the worst over for Australian investors?

The local sharemarket exploded this morning with the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) quickly gaining 1.8%. Investors can thank the market’s refreshed hopes the US Federal Reserve might hold off in increasing interest rates until next year for the sharp rise.

The United States equity market rallied on Friday night following a disappointing jobs report which revealed an increase of 142,000 in nonfarm payrolls, which was well below the market’s expectations. The jobless rate held at 5.1%.

Although that would ordinarily be a prompt for a selloff of shares, investors are responding warmly to the news based on the hope it could prolong an official interest rate hike, perhaps until early next year. Indeed, the Fed doesn’t want to increase interest rates until it is certain the US economy can handle it.

Despite a heavy fall in the iron ore price during the latest session, it was the nation’s biggest miners leading the charge north. BHP Billiton Limited (ASX: BHP) in particular soared 3.7%, while Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) gained 2.2% and 1.9%, respectively.

The banks were also well and truly back in the market’s favour. National Australia Bank Ltd. (ASX: NAB) and Commonwealth Bank of Australia (ASX: CBA) jumped 1.9% each, while Australia and New Zealand Banking Group (ASX: ANZ) and Westpac Banking Corp (ASX: WBC) gained 1.1% and 1.6%, respectively.

Elsewhere, Telstra Corporation Ltd (ASX: TLS) gained 1.3%, Woolworths Limited (ASX: WOW) rose 1.9% and Wesfarmers Limited (ASX: WES) lifted 1.6%.

Is it time to buy ASX shares?

It’s been a particularly volatile couple of months for investors – not just in Australia but around the world. As scary as a rollercoaster ride may be however, investors are clearly beginning to recognise value on the local market with the main bourse now hovering around the 5,140 point mark.

Whether or not the market has found a bottom yet remains to be seen, but now does look like a very good time to buy ASX shares. Sure, they might experience further losses in the near-term but if history is anything to go by (and in this case, it’s the only thing to go by) the best time to buy shares is when everyone else seems to be selling.

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Motley Fool contributor Ryan Newman has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. You can follow Ryan on Twitter @ASXvalueinvest.

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.