The bears are back in complete control today, wiping billions of dollars off the market's value in a rout led by the miners.
The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) is down 146 points, or 2.9% at 4,966 points, while the ALL ORDINARIES (Index: ^AXAO) (ASX: XAO) has also shed 2.7% to trade at 5,006 points.
The crash came after global equity markets plunged overnight as volatility hit back in full force. The Dow Jones' 1.9% decline looks almost comical compared to the NASDAQ's 3% demise, while the FTSE 100 and DAX also fell 2.5% and 2.1% respectively in Europe.
Once again, it was ongoing concerns regarding China's future growth prospects, together with crashing commodity prices, that weighed on the market's sentiment. Indeed, the iron ore price retreated further overnight, while Brent oil fell another 2.6% to US$47.34 a barrel.
Further falls are expected for both commodities with shares of commodities trader Glencore falling 23.5% in London overnight.
BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO) followed, crashing 6.1% and 5.5% respectively. It wasn't pretty for the energy producers either, with Woodside Petroleum Limited (ASX: WPL), Santos Ltd (ASX: STO) and Origin Energy Ltd (ASX: ORG) all losing between 4.5% and 7.7%.
The banks were also trading deep in the red. Australia and New Zealand Banking Group (ASX: ANZ) has been hit the hardest, down 2.8%, while Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd. (ASX: NAB) and Westpac Banking Corp (ASX: WBC) were down 1.8%, 2% and 2.3%, respectively.
It can be extremely difficult to remain calm on days like today – especially at a time where the market has already fallen so severely in weeks gone by. As tempting as it may be to sell and limit your losses however, that is a sure-fire way to lose money, fast.
While these tough conditions are bad news for day traders and investors with margin loans, long-term investors should simply accept the recent bout of volatility, and have faith that it will soon pass. Sitting on your hands and doing nothing may just be the best move you'll make.
