The Australian sharemarket is trading heavily in the red again today on the back of a number of disappointing earnings results and poor business confidence numbers which have dampened the market's mood.
After two months of upbeat data, the latest business confidence numbers were down once again which could well be attributed to the volatility experienced by China's stock market and the subsequent concerns about a slowdown in the world's second-biggest economy. Although confidence levels remain in positive territory, it is now sitting below the long-term average, which will no doubt give the Reserve Bank something to think about when they next meet in September.
At the same time, investors were also disappointed with the earnings presented by companies such as Cochlear Limited (ASX: COH) and FlexiGroup Limited (ASX: FXL) which plunged 9% and 16.6%, respectively. Electronics retailer JB Hi-Fi Limited (ASX: JBH) also plummeted almost 7% a day after rising 10.6% which could be attributed to profit-taking.
Although those three are among the market's biggest losers for the day; the banks are acting as more of a drag on the overall S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) which has fallen 0.7% so far, more than reversing yesterday's strong gains. As the banks form such a major part of the index, when they fall, the market generally follows.
Although Commonwealth Bank of Australia (ASX: CBA) has managed to rise 0.3%, its rivals, namely National Australia Bank Ltd. (ASX: NAB), Westpac Banking Corp (ASX: WBC) and Australia and New Zealand Banking Group (ASX: ANZ), have fallen 2.4%, 2% and 1.5%, respectively.
On the flipside, BHP Billiton Limited (ASX: BHP) recorded a 1.2% gain following a strong rise in oil prices overnight. Rio Tinto Limited (ASX: RIO), Orica Ltd (ASX: ORI) and Ansell Limited (ASX: ANN) also generated some interest amongst investors with the trio lifting 1.2%, 1.8% and 4.4%, respectively.
Given the market's recent volatility, now might seem like the worst possible time to even consider buying stocks. In reality however, now could actually be the perfect time to start buying with investors selling some of their quality stocks at considerable discounts. While some investors are looking at the banks after their recent sell-offs, the smart investors are looking at the smaller end of the market…
