Is the Australian stock market still a buy?

Investors who have ignored the Australian stockmarket over the past three years, "should be kicking themselves", says Sundeep Tucker in the FT. Last year, the S&P/ASX 200 share index rose nearly 18% having racked up 30% gains the year before.

Now, the index is poised to breach the "significant psychological milestone" of 5,000 points, says Shane Oliver of AMP Capital Investors in the Australian Daily Telegraph. Nearing this landmark has "triggered some profit taking over the past six weeks", but thanks to "a strong lead from Wall Street and bullish sentiment" in Australia, the resistance point looks set to be broken within days, says Byron Kaye, also in The Daily Telegraph.

Strong fundamentals pushed the market this far, says Tucker. "Whether or not overseas investors have taken the plunge", local money has been there to "drive the market ever upwards," he says. But 21% of the index is made up of mining stocks, Gerard Minack of Morgan Stanley told Tucker and if you strip the miners out, then the index looks expensive on 16 times forward earnings.

Australian stocks have benefited from a "once-in-a-generation," China-led resources boom that can't last. Even if it does, fluctuating commodity prices and questions over global interest rates and oil prices "could result in more share-market volatility this year", Oliver told the FT.