Australian shares have given up most of their early gains but are still trading in the black thanks to support from the banks. The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) rose to a high of 5397 points but has since retreated to trade at 5376 – up 0.4% for the day.
Leading into today's session, investors were largely focused on the reopening of Commonwealth Bank of Australia's (ASX: CBA) shares following a trading halt as the bank began its $5 billion capital raising. The selloff wasn't anywhere near as severe as some investors were anticipating with the bank down just 0.8% late in the day.
Meanwhile, Westpac Banking Corp (ASX: WBC) rose 2.4% after it said asset quality has continued to improve (despite a rise in bad debts which was "isolated to a small number of names"), while Australia and New Zealand Banking Group (ASX: ANZ) and National Australia Bank Ltd. (ASX: NAB) gained 1% and 1.7%, respectively.
While the banks are lending their support to the market; Australia's biggest miners are acting as a drag on its progress. BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO) have both fallen 0.5% after an equal drop in the iron ore price on Friday. The commodity is currently fetching around US$57 a tonne, but with further falls expected over the coming months, investors are justifiably growing uneasy in the sector.
Wesfarmers Ltd (ASX: WES), JB Hi-Fi Limited (ASX: JBH) and OzForex Group Ltd (ASX: OFX) are amongst the other big names pulling the market lower with the trio down 1.1%, 2.1% and 4%, respectively.
Although the market has risen today, it is clear that investors are still uneasy about what to expect in the near future. While their uncertainty is definitely understandable; the smart investors are taking full advantage and buying shares in high-quality companies at reasonable prices.
Sure, those investors could stand to lose some money in the near term, but history suggests they will also be the ones most well rewarded in the long run.
