Wrapping up the reporting season, BT head of equities strategies Crispin Murray said the market was currently witnessing a resurgence in retail, resource, and other embattled sectors.

“Companies that have been disrupted are fighting back, focusing on cost out and better earnings incomes,” Mr Murray said.

“It’s the capital return that really struck us, with a lot of companies engaging in buy backs such as QBE, Bluescope, Rio, and Crown,” he said.

Signalling a stronger domestic equity market, investors should take comfort in the recovery of some of these major Australian companies.

“A number of these had been facing significant challenges and they’d been working on repairing their balance sheet, fixing their costs, they’ve got more confidence about the future of their business and the returns they’re going to generate and as a result they feel more comfortable returning capital to shareholders and that confidence is what should be taken from this message,” Mr Murray explained.

The retail sector in particular has been at the forefront of this disruption.

“With the introduction of Aldi, we’ve seen new management at Woolworths addressing some of the market share losses they’ve seen and that has been a positive outcome for them,” Mr Murray said.

“[Meanwhile] JB Hi-fi has been consolidating in the consumer digital goods, buying The Good Guys and gaining market share,” he added.

However despite the strength of some of these companies, Mr Murray said investment fears still surround the sector more broadly.

“These companies have performed quite well in a tough retail market.[but] I think the market still remains sceptical of retail,[and] the threat of Amazon entering our market is certainly generating a lot of chatter,” he explained.

“So I think the retail sector is one we should still worry about but the companies within it are doing a good job in this environment.

While data shows the sector declined 0.1 per cent in December capping off a “soft” annual retail sales growth year, volume growth remains reasonable according to AMP chief economist Shane Oliver.

“Looking forward retail sales are likely to be supported by surging dwelling completions this year which should support sales of household goods, reasonable jobs growth and low interest rates but record low wages growth and an eventual fading of the wealth effect as the Sydney and Melbourne property markets slow will act as constraints,” Mr Oliver said.