The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has followed the lead set by Wall Street overnight, crashing another 80 points, or 1.8%, to trade at just 5,012 points.
Equity markets around the world crumbled overnight as a result of ongoing concerns regarding the health of China's economy which is, in turn, acting as a drag on key commodity prices.
According to The Washington Post, the Asian Development Bank also cut its growth forecasts for the region's developing economies (including China and India), predicting expansion of 5.8% this year and 6% next year. That's down from the 6.3% growth forecast provided as recently as March.
As expected, the resources sector wore the brunt of today's falls with BHP Billiton Limited (ASX: BHP) and South32 Ltd (ASX: S32) down 3.7% and 5%, respectively. Rio Tinto Limited (ASX: RIO) is also down 2.3% while Fortescue Metals Group Limited (ASX: FMG) has lost 3.4%.
Meanwhile, Woodside Petroleum Limited (ASX: WPL) and Liquefied Natural Gas Ltd (ASX: LNG) are down 2.3% and 7.7% respectively, with the latter falling to its lowest price in 15 months.
The banks didn't give much in the way of support, either. Westpac Banking Corp (ASX: WBC) and Commonwealth Bank of Australia (ASX: CBA) both lost more than 2% while Australia and New Zealand Banking Group (ASX: ANZ) and National Australia Bank Ltd. (ASX: NAB) were down 1.7% each.
The last month or so on the ASX has been particularly volatile, and thus, emotionally draining for investors. Unfortunately, given the high level of uncertainty and fear regarding the situation in China, it seems reasonable to expect that volatility to continue for the foreseeable future, as well.
The important thing for investors to do is to regain control over their emotions so as to not sell into the panic. While history suggests that these periods of pessimism are the best times to buy shares, many would prefer to wait on the sidelines for the volatility to pass. That's okay too – investors only need to keep their cool to do well in the long-run.
