The upcoming earnings season is forecast to be the most positive since the global financial crisis but growth is expected to be skewed towards the resources sector.
Analysts have forecast strong earnings growth, with Citi the latest to offer earnings estimates. The bank's head of equity strategy, Tony Brennan, told a briefing in Sydney on Tuesday morning that Citi was expecting 17 per cent earnings per share growth - the consensus of company estimates in recent weeks.
On Monday, UBS released its own forecast of 18 per cent earnings growth in calendar year 2017 (largely due to growth in the resources sector). And earlier, Bank of America Merrill Lynch issued its own expectations of an "earnings bonanza" to power equities in 2017.
But beneath a strong headline figure, analysts expect considerable divergence between sectors.
In the resource sector, Citi forecasts earnings growth at 82.7 per cent for the year - which would significantly lift the broad market average. Outside of resources, earnings are expected to grow 4.9 per cent on average. Citi's analysts say the weakness of recent economic data releases could see consumer-focused stocks surprising on the downside.
Even so, this will be the first positive figure since 2014, and likely the strongest growth in earnings since the global financial crisis. Earnings growth has been subdued since 2008.
"The last year of [earnings per share] growth was 2014," Mr Brennan said. "Before that you have to go back to 2011. Growth has been extremely limited since the financial crisis. This is probably going to be the best year since then."
The strong growth in expectations for resource sector earnings is partly down to rising commodity prices, as is the fact that the sector posted very little growth in 2016 - a year in which there were concerns about Fortescue Metals' high debt load, while BHP and Rio Tinto cut dividends. A lot has changed in the sector in the past 12 months, said Citi mining analyst Clarke Wilkins.
The improvement in commodity prices is also expected to feed through to other sectors.
"There's a significant benefit from coal prices to Wesfarmers," said Mr Brennan. "Retailing is forecast at 11 per cent [earnings per share growth]. Some of that is Wesfarmers' coal earnings."
"We are seeing an unambiguously good direction of the overall index - but it is narrow ... We'll see a bit of divergence."
Outside of resources, Citi expects food and beverage retailing to see strong earnings growth - 15.1 per cent on an earnings per share basis. Retailing companies are forecast to post on average earnings per share growth of 10.8 per cent.
Telecommunications stocks, meanwhile, are forecast to grow earnings by 9.0 per cent, though Mr Brennan said, that was due to government payments related to the NBN rollout. "[Telecoms] would be down if it wasn't for those payments," Mr Brennan said.
The only sector expected to post negative earnings growth is diversified financials - down 0.5 per cent. The banks are forecast to post earnings per share growth of 2.7 per cent.