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[SINGAPORE] Australian stocks sank to a bear market as resource companies and banks extended declines in a global equity rout triggered by concerns about China's economy and tumbling commodity prices.
The S&P/ASX 200 Index dropped 1.2 per cent to close at 4,775.70, its lowest since July 2013. The gauge has tumbled 20 per cent from its April peak, the level some traders define as a bear market. Markets from Europe to Japan and China have already fallen into this category.
"There's a sense of heightened global uncertainty, with more question marks around global growth," Chris Green, an Auckland-based strategist at First NZ Capital Group Ltd, a brokerage and wealth management firm, said by phone. "There seems to be policy fatigue among central banks and there's a realization from investors that the risks to global growth have increased."
BHP Billiton Ltd, the world's biggest mining company, dropped 2.5 per cent as copper continued its decline after Indonesia recommended Freeport-McMoRan Inc resume shipments from its Grasberg mine, potentially swelling a global glut.
Fortescue Metals Group Ltd sank 3.1 per cent after Morgan Stanley said an oversupply in iron ore will endure until at least 2020. Australia & New Zealand Banking Group Ltd lost 1.6 per cent and National Australia Bank Ltd fell 1.9 per cent.
A measure of Australian financial shares, which accounts for 46 per cent of the broader equity gauge, has slumped 14 per cent this year. BHP Billiton has dropped 12 per cent and Rio Tinto Group has lost 7.2 per cent.