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Australian stocks are diving

Domonic Bedggood and James Connor of Australia compete in the FINA Diving World Cup in Rio de Janeiro. The cup is a test event for Rio 2016 Olympic Games. Buda Mendes/Getty Images

The Australian market was being hammered.

The ASX 200 dropped through the key support level of 4900 points. A short time ago, the index was at 4,862.80, down 116.79 points or 2.35%.

The big miners were being crushed and the major banks sold off as global gloom smothered the local market.

“The ASX 200 has failed at 5000 and stocks have been hit hard today,” says Chris Weston at IG.

Overnight Wall Street fell sharply as oil prices weakened and the banks were ditched. The S&P 500 closed down 1%.

On the local market, BHP dropped more than 8% to $16.1 after yesterday posting a massive loss and a cut in dividends.

This is the worst one day fall for BHP since December 2008. BHP’s share volume is 150% above the 20 day average.

Rio Tinto fell 6.2% to $41.83.

All four of the major banks shed 3%. Westpac was down 4% to $28.45.

WorleyParsons shares dropped more than 12% to $3.68 after the services company posted a 77.9% fall in profit to $23.1 million as low oil prices cut its business in the resources sector.

Qantas was up 5.5% to $4 on the back of easing oil prices.

Gold stocks, the tradition flight to safety in troubled times, were gaining ground. Northern Star was up 3.84% to $3.92 and Evolution 4.6% to $1.81.

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