The Australian sharemarket has extended its decline today, plunging below the 5,600 point mark for the first time in more than three months. The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) slipped by as much as 0.7% earlier in the session, but has since managed to regain some composure to be down just 0.1% at 5,609 points.
While most international equity markets actually rose overnight, the local bourse was dragged down by falling commodity prices. This was partially due to a stronger US currency.
Iron ore, for instance, experienced its heaviest fall in weeks as it dropped 3.5%, dragging companies such as Fortescue Metals Group Limited (ASX: FMG), BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO) into the red. The trio dropped 7.2%, 3.3% and 2.8% respectively, in what could be the beginning of another steep fall for the sector.
Unfortunately, oil and gold prices didn't fare any better overnight. While Brent oil declined by 3.1%, hitting companies like Santos Ltd (ASX: STO), Senex Energy Ltd (ASX: SXY) and Origin Energy Ltd (ASX: ORG), spot gold also shed 1.4% of its value which hurt Newcrest Mining Limited (ASX: NCM) and EVOLUTION FPO (ASX: EVN). Newcrest was down 1.6% while Evolution tumbled 4.2%.
While it was the resources sectors inflicting most of the damage for the day, investors are likely to be just as concerned about the Big Four banks. Commonwealth Bank of Australia (ASX: CBA) has fallen a further 0.3%, while National Australia Bank Ltd. (ASX: NAB) and Australia and New Zealand Banking Group (ASX: ANZ) have retreated 0.5% each.
Indeed, all four banks have experienced sharp declines in recent weeks since the release of their latest earnings reports and there are signs they could have even further to fall.
