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ASX market crushed: $24 billion wiped out

The S&P / ASX 200 Index (Index: ^AXJO) (ASX: XJO) has experienced its worst day since September 2013, losing 1.5% to close at 5,214.4, and wiping an estimated $24 billion off the value of the market.

No sectors were spared with every one finishing in the red. Consumer discretionary was the worst performer, droping 2.2%, while the Information technology sector lost 2% and the financials and industrials each fell 1.7%.

Weak earnings results from a number of US stocks saw Wall Street fall 1.5% overnight, with many investors questioning whether company earnings will justify their lofty prices.

The biggest loser on the ASX 200 was mining services company Forge Group (ASX: FGE), down 18%, after reporting another profit write-down on its troubled power station contract.

Alumina (ASX: AWC) and Western Areas (ASX: WSA) were the main bright spots, as they continued to benefit from yesterday’s news that Indonesia was banning the export of unprocessed ore such as nickel and bauxite. Both companies rose more than 4% today.

But it was the big end of town that drove the market lower, with Macquarie Group (ASX: MQG) losing 2.9%, with Brambles (ASX: BXB), Origin Energy (ASX: ORG) and National Australia Bank (ASX: NAB) all sliding 2%. Not one company in the Top 20 managed to post a rise.

Today’s fall was the seventh in eight trading sessions, and it appears that the slide could continue. Japan’s Nikkei index was battered down 3.1% in afternoon trading, and analysts have suggested investor confidence is slipping. IG’s Chris Weston told Fairfax Media today that “we could easily see US stocks headed lower again”.

Foolish takeaway

While others despair, Foolish investors may well be rubbing their hands together with a view to picking up some stocks on the cheap. It may also be pertinent to remember that a few days don’t make an investing life time.

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Motley Fool writer/analyst Mike King owns shares in Forge. You can follow Mike on Twitter @TMFKinga

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