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Shares shed more than $40 billion as S&P/ASX 200 crumbles

When the Dow Jones plummets 3.12% on a Friday night, you know things are going to be rough on the Australian market come Monday morning.

Indeed, global equity markets have been left shaken by fresh concerns emerging from Greece and Europe while the state of the US and Chinese economies is also under the magnifying glass. In the US, the Dow Jones suffered its worst fall in nearly four years, while the NASDAQ and S&P 500 both tumbled 3.52% and 3.19%, respectively. Meanwhile in Europe and China, the FTSE 100 lost 2.83% while the Shanghai Composite plunged 4.27%.

As a result of Australia’s close relationship with China, we were always going to be hit hard as well. The local S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) fell as much as 145 points, or 2.8%, to a fresh 18-month low of 5069 points. That equates to more than $40 billion wiped from the value of Australia’s 200 biggest companies – only eight of which are trading in the black today.

As one would expect in such a situation, the losses have been widespread although it is the nation’s major banks and miners inflicting most of the damage.

National Australia Bank Ltd. (ASX: NAB) for instance is down 2.3%, while Commonwealth Bank of Australia (ASX: CBA), Australia and New Zealand Banking Group (ASX: ANZ) and Westpac Banking Corp (ASX: WBC) have plunged between 2.4% and 2.9%.

In the resources sector, BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO) are also down 3.4% each, while Fortescue Metals Group Limited (ASX: FMG) is down an agonising 8.4%.

Other blue-chip companies such as Telstra Corporation Ltd (ASX: TLS), Woolworths Limited (ASX: WOW) and Wesfarmers Ltd (ASX: WES) have also fallen sharply.

On days like today, few investors are going to walk away unscathed while plenty of others are going to take their money off the table and rush for the exits. However, that could be one of the worst moves to make for investors looking to build their long-term wealth.

Whether or not there are further falls to come remains to be seen, but the investors who remain calm and maintain their composure will be the ones who are rewarded in the long term. To ensure you’re prepared in case things do get worse, you could take just a few minutes to read our investing experts’ advice for surviving a sharemarket crash.

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Motley Fool contributor Ryan Newman has no position in any stocks mentioned. You can follow Ryan on Twitter @ASXvalueinvest.

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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