In what can only be described as a 'bloodbath', the Australian stock market has been absolutely smashed this morning.
Following a horror night on Wall Street, which saw the Dow Jones and NASDAQ indices plummet 1.97% and 2.02% respectively, Australia's benchmark S&P/ASX 200 (INDEXASX: XJO) has also retreated 2%, representing a fall of 107.8 points.
While dovish comments from the US Federal Reserve gave investors a chance to catch their breath yesterday, they are once again running in fear based on a poor outlook for world growth. In particular, the International Monetary Fund's downward revision for global growth earlier this week has investors on edge, while weak economic data from Germany overnight exacerbated the panic.
Investors have found it almost impossible to avoid the carnage this morning with the pain widespread through the market. The banks – in particular Westpac Banking Corp (ASX: WBC) and Commonwealth Bank of Australia (ASX: CBA) – have acted as the heaviest drag, while Telstra Corporation Ltd (ASX: TLS) and Wesfarmers Ltd (ASX: WES) are also down 1.4% and 2% respectively.
The miners have also been hit hard, particularly after the iron ore price retreated 1.6% overnight to be trading at US$77.88 a tonne. BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO) have dropped 2.8% and 2.6% respectively, while Fortescue Metals Group Limited (ASX: FMG) has plunged 4.3%.
A buyer's market
These times of high market volatility can be truly testing for investors (myself included). It can be absolutely agonising watching your portfolio plummet in value – especially when we've all become so used to shares climbing strongly, as they have done in recent years.
As testing as it is however, these times can actually be one of the greatest opportunities to buy shares. After all, no one ever got rich from following the crowd, and as legendary investor Warren Buffett once said: "Be fearful when others are greedy and greedy when others are fearful".
