The Dow Jones Industrial Index was down 0.63% overnight, with the Nikkei down 0.54% and the FTSE 100 hammered, down 2.81%.
Commodities were also hit overnight, with everything but three-month tin (up 0.29% to $US17,200 per tonne) in the red. Lead and zinc were the worst hit, down 3.98% to $1762/t and 3.53% to $1857/t respectively.
All the major Australian indices finished down. The All Ordinaries dropped 1.63% to 4342.4 points, the S&P-ASX 200 was down 1.61% to 4316.5 and the S&P-ASX 300 Metals and Mining Index finished down 1.47% to 3920.8.
Of the major miners, Fortescue Metals Group was smashed again today, down 7.75% to $A3.57 and reaching an intraday low of $3.53.
The company has lost nearly $1 from its share price since the $4.54 price at the end of April, the last trading day before news broke that the Henry Tax Review had proposed a resource rent tax on the mining sector.
BHP Billiton closed down 22c to $36.75, while Rio Tinto was down 63c to $62.25.
Alumina closed down 2c to $1.59, Aquarius Platinum had another bad day, down 24c to $6.23, and Murchison Metals was again the worst hit of the larger caps, down 16c to $1.79.
Drilling contractor Boart Longyear also closed well down for the second day in a row, losing 21c to $2.77.
The only real bright spot for the larger miners was rare earth company Lynas Corporation, up 1.5c to 49.5c.
It was much the same among the medium caps. Straits Resources had a good day, up 7.5c to $1.315, with Orocobre up 7c to $2.22 and Conquest Mining up 1c to 37.5c.
Australasian Resources was the worst performer of the mid caps, down 5c to 27c, followed by Resolute Mining, down 15.5c to $1.005.
Gold stocks were particularly badly hit, with the S&P All Ordinaries Gold Index down 2.88% to 5906.2 at the end of the day and spot gold sliding, trading at $US1187.2 per ounce shortly before the close of the market.
All the major gold stocks took a hit, with Newcrest down A92c to $31.68, Lihir down 11c to $3.93, Eldorado Gold down 25c to $19.40 and CGA Mining down 5c to $2.40.
Even Kingsgate Consolidated, which has held up relatively well in recent weeks, closed down 29c to $8.60.
The Australian dollar took another pasting, falling as low as US82.72c at one point and holding at 83.15c near the close of the session.
Standard Chartered strategist Callum Henderson told Dow Jones Newswires this afternoon he expected the dollar should hit a base and bounce at around US81.09c, though a “test of 80c is also a risk”
He said an unwind of the current positioning should be nearing an end soon.
"The speed and extent of this move is from our point of view premature. I would expect to see a bounce at some stage."
The overall picture looked negative, however, with signs of softening data, the RBA sounding less hawkish and, most importantly, a base for the euro, meaning the Aussie dollar will remain under pressure.
