The ASX All Ordinaries fell sharply in the first few minutes of trading, as all sectors of the market moved into negative territory. The index sank to numbers not seen since October 2004, eventually closing the day down 5.4% or 211.2 points at 3672.4.
The S&P-ASX 200 was even more shocking, losing 5.9% (230 points) to 3697.3 by the home-time bell.
The bourse behaving badly followed on from similar displays in the United States markets with New York’s Dow Jones Industrial Average shedding 4.7% overnight to close at 8283 points.
The fall reflected deepening economic concerns and the impact of the US government’s decision not to buy up dodgy mortgage securities and ailing car companies.
US Treasury Secretary Henry Paulson said the $US700 billion bailout would go toward struggling banks as well as the non-bank financial sector, a declaration that appeared to leave investors flailing.
Burrell Stockbroking Associate Peter Wright told AAP the uncertainty was propelling the market dive, leaving big question marks for companies in need of funding.
“Markets don’t like ambiguity and uncertainty,” he said.
“I’m sure in [Henry Paulson’s] own mind he had a pretty well-defined strategy. But where does that leave institutions that are looking for that money?”
Back home and resource stocks put in a dismal session with the red paintbrush tarnishing big and small alike. But the losses at the big end of town were particularly cringe worthy.
An end of session meltdown saw BHP Billiton plunge 11.7% or $3.30 to $25.
Meanwhile Rio Tinto sank on opening, then jumped nearly 3% just after 10.20am, only to slide back down to close 8.2% ($6.20) down on $69.
Spot Gold lifted marginally, up 0.44% %US713.90, but it had little impact on Aussie gold miners. Newcrest shed nearly 5% to $19.96, Lihir was down 10.8% to $1.775 and Sino Gold Mining dropped 4% to $2.89.
Kingsgate Consolidated was one of a rare few to buck the trend, gaining 17c or 5% to $3.59 on news of a fresh gold discovery in Thailand.
The majority of base metals posted further losses on the London Metal Exchange. Both copper and aluminium hit three-year lows with spot copper down 0.53% overnight to $US3583 and aluminium slipping 1.2% to $US1870.25.
Copper plays weakened with OZ Minerals down 6.6% to 92c, Indophil down 8.2% on 72.5c and Straits Resources shedding 11% to $1.095.
Among the day’s winners was Conquest Mining, up 1.5c to 19.5c on positive developments at its Silver Hill deposit, and New Hope Corporation, up 10c to $3.39 after detailing recent profit growth.
In wider investment news the federal government today moved to permanently ban “naked” short-selling while the current ban on traditional “covered” short-selling is due to be lifted in coming weeks.
The local hedge fund industry voiced approval for the ban on naked shorting but called for the blanket ban on shorting to be lifted.
"If the ban is lifted on non-financial stocks next week, investors will see better price discovery, deeper markets, closer bid-ask spreads, and over time, less volatility," Alternative Investment Management Association chairman Kim Ivey told Reuters.
