The carnage was sparked by a 9% fall in the value of the Shanghai Composite Index, which $140 billion in value in its biggest single-day fall in a decade.

That triggered a fall of 3.3% on the Dow Jones index and a slide of 3.5% in the Nasdaq Composite index.

Those leads sparked panicked selling across the Australian Stock Exchange, and in resource equities in particular.

Many of Australia’s largest miners have recorded drops in excess of 10%, and only seven of the 494 mining and exploration companies on MiningNews.net’ resources watchlist had managed gains.

It seemed no coal company was exempt from the onslaught –big players BHP (down 5.48%) and Rio Tinto (down 4.91%) experiencing the same slide as smaller and newer players such as Bowen Energy (down 16.67%) and Resource Pacific (down 4.32%).

Mid-tier players also took the blow. At time of press Centennial was trading down 3.28%, Felix slid 9.84% and Straits Resources was down 3.12%.

However, there were signs at the time of writing that the market was beginning to settle down, with many stocks starting to make up the losses as bargain hunters moved in.

Hartleys resources analyst Andrew Muir told MiningNews.net that the panic was a knee-jerk reaction.

“The thing to note is that the fundamentals haven’t changed for most, if not all, companies,” Muir said.

“It might not be a bad time to start looking for some bargains.”

Muir pointed to nickel stocks in particular, given that the price of nickel rose yet again overnight to another all-time record. The stainless steel additive closed at more than $US45,000 per tonne on the London Metal Exchange overnight.

Muir’s sentiment was echoed in comments from Commonwealth Securities chief equities economist Craig James, who spoke to Dow Jones Newswires.

“It is a fear-driven market but the good news is that nothing has changed in terms of the fundamentals,” James said.

“It wasn’t fundamentals that drove the Chinese market down but rumours, so this is not a case for panicking for any investor,” he added.