It hasn't been the ideal start to September with the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) extending its decline today, adding to the pain of August's 8.6% drop.
The local bourse fell another 1.3% to just 5137 points, led down once again by the nation's Big Four banks as investors responded to the Reserve Bank of Australia's latest decision on interest rates.
Following last week's sudden crash, investors grew hopeful of an official interest rate cut but those hopes soon faded, resulting in a retreat for the nation's biggest dividend payers. Australia and New Zealand Banking Group (ASX: ANZ) plunged just over 2% while its three major banking rivals were all down between 1.1% and 1.7%.
There was plenty of selling in the resources sector as well, even with the 8% rise in oil prices overnight. Indeed, investors are increasingly losing faith in China's economic growth prospects after the nation's official factory gauge fell to its lowest reading in three years, despite five interest rate cuts since November.
BHP Billiton Limited (ASX: BHP) was down 1.3%, while Santos Ltd (ASX: STO) and Rio Tinto Limited (ASX: RIO) were off 3.8% and 1.7% respectively. Although the market is currently presenting plenty of great long-term opportunities, investors need to be prepared for more volatility in the near future.
