The local sharemarket is a sea of red again today.
The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) somehow managed a 1.9% gain on Tuesday, defying ongoing concerns about Greece's 'debt crisis', China's rout and crashing commodity prices. Unfortunately, it has been unable to repeat the performance, shedding 91 points or 1.6% to sit at just 5490 points today.
Although investors remain uncertain about what happens next in Europe (with Greece seen as highly likely to leave the Eurozone), it's issues closer to home that are worrying the market today. Firstly, the Chinese government has so far been unsuccessful in stemming its local sharemarket's tailspin with more than 40% of listed companies in Shanghai and Shenzhen being forced into a trading halt, according to the Fairfax press.
Concerns about the Chinese market and the spillover effects it could have on the Australian economy are also impacting commodity prices, in a big way. Iron ore fell for the ninth straight session overnight, falling 5.1% and giving it a loss of almost 25% since early June. Oil and copper prices are also under pressure with further falls expected.
As would be expected under the circumstances, Australia's resources stocks are amongst the hardest hit today. BHP Billiton Limited (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) have shed between 2.5% and 5.2%, while Woodside Petroleum Limited (ASX: WPL), Oil Search Limited (ASX: OSH) and Santos Ltd (ASX: STO) have fallen between 2% and 3.4%.
The nation's largest banks are also under fire. Australia and New Zealand Banking Group (ASX: ANZ) shed 2.5%, while National Australia Bank Ltd. (ASX: NAB), Westpac Banking Corp (ASX: WBC) and Commonwealth Bank of Australia (ASX: CBA) lost 2.3%, 1.9% and 1.8%, respectively.
Elsewhere, Telstra Corporation Ltd (ASX: TLS), Wesfarmers Ltd (ASX: WES) and CSL Limited (ASX: CSL) also recorded heavy losses, with the pain being felt throughout the market.
Indeed, the volatility of the market goes to show just how uncertain investors are at the moment. While I would argue that now is a great time to load up on some high-quality companies trading at discounted prices, it is equally important that investors remain prepared for even more pain and ask yourself…
