The S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) scored its greatest week in over two years last week, with the index soaring 189.8 points or 3.7% to put the market into positive numbers for 2014, finishing the week sitting at 5,356.3 points.
Prior to the last five trading days, the ASX 200 had fallen over five consecutive weeks on the back of weak data from both China and the US. It had threatened to drop below 5,000 points. Having watched their portfolios plummet in value, Australian investors waited anxiously for some good news to emerge from the results of some of the nation's largest corporations and they were not left disappointed.
Although few companies have delivered bullish outlooks, the effects of aggressive cost cutting and the focus on improving productivity were reflected in corporate earnings. Telstra Corporation Ltd (ASX: TLS) for instance, delivered a $1.7 billion profit for its first half (up 9.7% on the previous year) and increased its interim dividend for the first time in eight years to 14.5c a share – a clear sign of improving confidence.
Mining giant Rio Tinto Limited (ASX: RIO) also delivered a better-than-expected result of $10.2 billion in underlying earnings, up 10% year-on-year, whilst also announcing a 25c increase in dividends to $1.92 a share. Positive reports from other major companies including Commonwealth Bank of Australia (ASX: CBA), Australia and New Zealand Banking Group (ASX: ANZ), Boral Limited (ASX: BLD) and Newcrest Mining Limited (ASX: NCM) also contributed to greater investor confidence.
Here are some of the other big winners from last week:
- Carsales.com Limited (ASX: CRZ) soared 19.8%
- Computershare Limited (ASX: CPU) recorded a gain of 8.7%
- Domino's Pizza Enterprises Ltd (ASX: DMP) climbed 16.9%
- G8 Education Ltd (ASX: GEM) boosted 12.5%
- Kingsgate Consolidated Limited (ASX: KCN) jumped 19.8%
- Mount Gibson Iron Limited (ASX: MGX) gained 15.1%
- Qantas Airways Limited (ASX: QAN) flew 14.1%
- Webjet Limited (ASX: WEB) booked in an 18.2% gain
- St. Barbara Limited (ASX: SBM) jumped 22.6%
- Resolute Mining Limited (ASX: RSG) appreciated by17%
Companies such as Bradken Limited (ASX: BKN), Emeco Holdings Limited (ASX: EHL) and iSelect Ltd (ASX: ISU) were not so lucky, with their shares falling between 9.6% and 10.7% for the week.
Foolish takeaway
The market's rally should be enough to show investors how risky it can be to try to time the market and wait for even lower prices before hitting the 'buy' button. Investors should not let the difference of a few cents or percentage points affect their investment decisions, but should buy companies that they believe are trading at attractive prices and boast good long-term prospects.
