Investors hoping for another week similar to last week will be bitterly disappointed.
After rising 4.5% last week – its strongest gain in four years – the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has fallen in each of its last three outings, losing a total of 1.9% including another 0.4% today.
Again, it is the nation's energy sector that is leading today's falls after oil prices fell further overnight. Santos Ltd (ASX: STO) shed another 5.5%, while Liquefied Natural Gas Ltd (ASX: LNG), Woodside Petroleum Limited (ASX: WPL) and Origin Energy Ltd (ASX: ORG) were down 7.6%, 1.5% and 3.7%, respectively.
The losses were likely exacerbated by weaker-than-expected trade data from China yesterday which revealed the eleventh consecutive month of falling imports. Considering it has been the major contributor to global growth in recent years, a slowdown in the world's second biggest economy will almost certainly have a negative impact on the resource's price.
The banks also produced mixed results after Westpac Banking Corp (ASX: WBC) announced it will raise another $3.5 billion in capital from shareholders in order to add 1% to the bank's required regulatory capital ratio (CET1). You can read more about that here.
While Westpac's shares entered a trading halt, Australia and New Zealand Banking Group (ASX: ANZ) fell 0.6% and National Australia Bank Ltd. (ASX: NAB) and Commonwealth Bank of Australia (ASX: CBA) rose 0.7% and 0.2%, respectively.
Given the market's heavy falls recently, I believe now could be an excellent time for investors to start buying shares – especially in companies offering solid dividend yields.
In saying that however, I also think there could be more volatility to come. Indeed, there is still plenty of uncertainty surrounding China and commodity prices, and any piece of bad news could set the sharemarket backwards. As such, investors need to ensure they're well prepared in case the market does fall further.
