Australian stocks are tanking

Australian fans look worried at the Rugby World Cup Finalin London. Chris Ratcliffe/Getty Images

Australian stocks were smashed.

Billions of dollars in value was ripped from the market, the ASX 200 was dragged toward the 5000 mark and BHP was trading below $20 for the first time since 2008.

A short time ago, the index was at 5,016.50, down 109.19 points or 2.13%.

The big miners led the slide.

BHP dropped below $20 a share, a fall of 3.67%. to $19.85, a seven year low.

The world’s biggest miner has lost more than 15% since the fatal iron ore mine disaster in Brazil last week.

Fortescue lost 5.5% to $2.22 and Rio Tinto more than 2% to $48.43. South32, the BHP spinoff, was down more than 6% to $1.272.

And the major banks followed, with the ANZ losing 2.2% to $26.03 and the Commonwealth 2.4% to $75.52.

All ten sectors were in the red with energy stocks shedding 3.8%.

Among them, Santos was down almost 8% to $3.97, adding to yesterday’s 27% fall when the energy producer came out of a trading halt after a capital raising.

Local investors followed Wall Street where the S&P 500 dropped by 1.4% overnight.

The outlook for China also turned darker overnight with official numbers showing credit activity dropping in October to its lowest level in 15 months.

This fed more negative sentiment into Australian resource stocks.

“This is a commodity story pure and simple and the implications this is having on various markets,” says Chris Weston, chief market strategist at IG.

“We’ve seen a pick-up in volatility and under performance in credit (in China) and that’s a big leading indication for equities.

“The big questions are will BHP close below $20 and will the ASX 200 come down to test the 5000 level.”

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.