Negative leads from overseas markets sent the S&P/ASX 200 index (XJO) tumbling on Monday as it closed 42 points lower at 5823 points.
It is likely to be a similar story today with prevailing sentiment in overseas markets worsening overnight, suggesting steeper declines today.
The ASX SPI200 futures index is down 57 points to 5754 points, and it would appear that this could be a best case scenario.
Not only will investors be eyeing off sharp falls in Europe and the US, but they will also be wary of poor performances across a number of commodities.
Our large mining companies attributed for a significant proportion of yesterday’s losses and this trend is likely to continue today given negative price movements across iron ore, gold and oil.
Europe set the scene for a night of carnage with the FTSE 100 shedding 202 points or 3.4% to close at 5804 points with negative sentiment in the region largely driven by indications of another wave of coronavirus.
Mainland European markets were hard hit with the DAX plunging 573 points or 4.4% to close at 12,502 points.
The CAC 40 was also hammered, falling 3.7% to 4792 points.
This set the tone in the US with the Dow opening more than 400 points lower before shedding another 500 points in morning trading.
At one stage the index hit a low of 26,715 points, more than 900 points below the previous day’s close.
When Wall Street closed, the Dow was sitting at 27,147 points, down 510 points or 1.8%.
Declines of between 4.5% and 5% were recorded by American Express, 3M and Caterpillar Inc with the latter feeling the impact of negative sentiment towards the resources services sector.
Apple Inc and Microsoft Corp managed to buck the trend as they gained 3% and 1% respectively.
The confidence in tech stocks was reflected in the performance of the NASDAQ as it closed at 10,779 points, a decline of just 14 points.
The S&P 500 shed 38 points or 1.2%, closing at 3281 points.
On the commodities front, iron ore was hard hit as it broke below the US$120 per tonne mark, representing a decline of about 4%.
Gold had one of its rare bad days, falling more than 2% to trade in the vicinity of US$1920 per ounce.
Oil gave up much of the gains made towards the end of last week, falling from around US$43 per barrel to close at US$41.44 per barrel, but it did seem to be regaining some positive momentum in evening trading.
The Australian dollar weakened substantially as global markets went into freefall, hitting US$0.72 for the first time in nearly four weeks.
Among the base metals, copper fell substantially as it retraced from the recent high of about US$3.10 per pound to US$3.00 per pound.