Australian market closes 2.7pc higher after stunning rebound Equities Stephen Cauchi Investors enjoyed a spectacular bounce on the Australian sharemarket on Tuesday, with the local index initially plunging below 5000 for the first time in two years before it shook off a dismal overseas lead and further falls in China to end 2.7per cent higher. 
The benchmark S&P/ASX 200 index reached a nadir of 4928.3 shortly after opening but then performed, at its peak, an impressive 223-point turnaround - equivalent to a 4.5per cent intraday rally.
The index ended the day up 136 points at 5137.3, a day after suffering the worst day of trading since the global financial crisis. The broader All Ordinaries index closed 130 points, or 2.6per cent, higher at 5143.8.
Analysts had been expecting the local sharemarket to follow the dwindling fortunes of Chinese stocks, which crashed 8.5per cent on Monday. On Tuesday the rout continued, with the key Shanghai index 6.2per cent lower in late afternoon trade, although it failed to dent the rally in local shares.
Instead, investors appear to have been buoyed by signs of an incipient bounce on Wall Street on Tuesday night, while also indulging in some bargain hunting, Credit Suisse analyst Damien Boey said.
"Our market opened lower because that's what the futures were saying and then it went up as soon as the futures [market] went up," Mr Boey said.
The initial drop in Australian shares tracked a lead set in the US overnight, where the Dow Jones lost 588.40 points, or 3.6per cent, after sliding as much as 6.6per cent.
There were similar falls elsewhere in the world, with Europe's Stoxx 50 falling 5.4per cent and the UK's FTSE dropping 4.7per cent on Monday night.
"The downward pressure in the Chinese sharemarket has continued, but the rest of the Asian region seems to be quite resilient to the downward pressure," said Perpetual's Head of investment market research Matthew Sherwood.
The sell-off on the Australian market is prompting speculation as to whether sharemarkets have bottomed.
"Many will be trying to pick the low here," said IG market strategist Chris Weston. "This is not just an Aussie issue - equity markets around the world are so oversold.
The big four banks all finished in positive territory, with ANZ up 4per cent to $27.99, Commonwealth Bank 3.6per cent to $75.08, National Australia Bank 4.6per cent to $31.09 and Westpac 4.9per cent to $30.90.
BHP added 2per cent to $23.34.
Competitor Rio Tinto was up 3.1per cent to $48.45.
Among Tuesday's results, socks and jocks maker Pacific Brands soared 15.6per cent to 44.5 cents despite a reporting a bottom-line loss of $97.7 million in 2015 - its fourth loss in five years.
Shares in packaging giant Amcor jumped 4.3per cent to $13.05 after the company delivered modest gain in net profit, beating analysts' estimates.
The company delivered net profit of $US680.3 million ($946.09 million) for the 12 months ending   June 30, compared to analysts' expectations of $US670.4 million.