The Australian sharemarket is diving amid a global sell-off sparked by fears of deflation and standstill economic growth, with a plunge on the Chinese markets pushing the local index to a two-year low at noon. Stocks on the local exchange fell sharply at the open, with the benchmark index quickly moving to its lowest point since December 2013 in early trade following Friday’s 3 per cent plunge in US equities.
China’s main stockmarket gauge, the Shanghai Composite index, tumbled 6 per cent in the first minutes of trade, despite Beijing authorising the state pension fund to invest in stocks to shore up the markets.
Today’s decline followed the rout on Wall Street at the end of last week, with the Dow falling more than 1,000 points for the week, as concerns about China’s economy pushed the index into correction territory. Japan’s Nikkei opened 2 per cent lower today, while New Zealand’s stock market was tracking around 2 per cent weaker at noon.