Australian shares saw a significant drop on Wednesday, continuing the previous session's downward trend. The benchmark S&P/ASX 200 plummeted below the 8,000 threshold, influenced by widespread negative signals from Wall Street overnight. This decline was driven predominantly by weaknesses in the mining and energy sectors amid falling commodity prices. The S&P/ASX 200 Index decreased by 145.40 points or 1.79 percent to 7,957.80, after hitting a low of 7,951.70 earlier. The broader All Ordinaries Index also fell, down 155.20 points or 1.87 percent to 8,167.50. Australian markets had closed slightly lower on Tuesday.
In the mining sector, major players such as BHP Group dropped more than 1 percent, Rio Tinto decreased by nearly 2 percent, and Fortescue Metals fell by almost 4 percent. Mineral Resources remained flat.
The oil sector mostly witnessed declines. Origin Energy edged down by 0.2 percent, Santos lost more than 2 percent, Woodside Energy declined nearly 2 percent, and Beach Energy fell by almost 3 percent.
Tech companies faced challenges as well, with Afterpay owner Block and Zip each losing over 2 percent, WiseTech Global dropping almost 2 percent, and Xero falling by more than 1 percent. Meanwhile, Appen surged by nearly 6 percent.
Among the major banks, Commonwealth Bank, National Australia Bank, and Westpac each dropped nearly 2 percent, while ANZ Banking fell by over 1 percent.
Gold miners also struggled, with Northern Star Resources and Newmont each falling by more than 1 percent. Evolution Mining declined by nearly 2 percent, Gold Road Resources dropped over 4 percent, and Resolute Mining tumbled more than 3 percent.
In economic news, Australia's services sector continued to expand in August at a faster rate. The latest survey from Judo Bank indicated a rise in the services PMI to 52.5, up from 50.4 in July, indicating growth above the 50-mark that separates expansion from contraction.
On the currency front, the Australian dollar was trading at $0.670 on Wednesday.
In the U.S., stocks plunged on Tuesday, erasing the strong gains made last Friday. The Dow tumbled from its record closing high set in the previous session. Despite recovering from the worst levels before the close, major indexes posted substantial losses. The Nasdaq fell by 577.33 points or 3.3 percent to 17,136.30, the S&P 500 dropped by 119.47 points or 2.1 percent to 5,528.93, and the Dow decreased by 626.15 points or 1.5 percent to 40,936.93.
European markets also experienced significant declines. The German DAX Index fell by 1.0 percent, the French CAC 40 Index slid by 0.9 percent, and the U.K.'s FTSE 100 Index dropped by 0.8 percent.
Crude oil prices saw a sharp decline, hitting a nine-month low on Tuesday due to oversupply concerns from OPEC. West Texas Intermediate Crude oil futures for October fell by $3.21 or 4.4 percent, closing at $70.34 a barrel.
