Daytrading September 29 pre-market

Morning traders. Thanks Trees and after-market regulars. A tin hats day ahead.

Market wrap:

The share market faces a 100-point opening plunge after BHP and Rio Tinto hit fresh six-year lows in the US during a grim night on overseas markets.

The December SPI200 futures contract slumped 104 points or 2% to 5002 as all major European and US equity indices except the Dow retreated at least 2%.

US stocks tumbled back towards their August lows as traders dealt with weak Chinese economic news, questions over the future of London mining giant Glencore, mixed messages from Federal Reserve officials and an accelerating rout in biotechs. The S&P 500 fell 50 points or 2.57% to 1,882, closing below the 1,900 level for the first time since late August. The Dow shed 313 points or 1.92% and the Nasdaq 143 points or 3.04%.

"The broad healthcare sector and China are hurting the market. It's time for risk-off and there's no place to hide," Richard Weeks, managing director at HighTower Advisors in the US, told Reuters.

Australian heavyweights BHP and Rio Tinto were knocked down to their lowest levels since 2009 by a one-two blow from Chinese economic news and Glencore's woes. BHP lost 4.36% and Rio Tinto 4.58% in US trade. Data showed profits at Chinese industrial companies fell 8.8% from the same time last year, underlining fears that the economy is slowing rapidly. Shares in miner and commodity trader Glencore collapsed 29.42% overnight in the UK amid concerns about high debt levels and weak commodity prices. Read more here.

Panic selling in health stocks continued amid signs of mounting political pressure for greater regulation. The health care sector fell more than 4% and the iShares Nasdaq Biotechnology Index 6.33% following reports that Democrat politicians want to pursue Valeant Pharmaceuticals over price hikes earlier this year. Read more here.

"I think it's a lot of panic. It's a lot of people who came in recently," Paul Yook, portfolio manager at BioShares Funds in the US, told CNBC. "In hindsight clearly the market did not price in this political risk."

Adding to the sense of confusion last night were speeches by four different members of the Federal Reserve. While New York Fed President William Dudley said the central bank will likely raise rates this year, he said the outlook for the US economy had been muddied by international events.

"I think the biggest focus remains Fed uncertainty. You hear Dudley saying, uncertainty about the outlook can't be eliminated," Peter Cardillo, chief market economist at Rockwell Global Capital in the US, told CNBC. "The Fed has created this wall of uncertainty even as we get good economic data."

Consumer spending increased by a robust 0.4% last month and July spending was upwardly revised to the same growth, according to data released last night. Personal income increased by 0.3%. The reports fuelled a brief rally in the US dollar on the increased likelihood that the Fed will raise rates this year.

European markets were led sharply lower by mining stocks and car-markers as the Volkswagen emissions scandal continued to weigh on sentiment. The Stoxx Europe 600 lost 2.21%, Germany's DAX 2.12%, France's CAC 2.76% and Britain's FTSE 2.46%.

The US energy ETF dived 3.99% as Chinese concerns sent crude lower. West Texas Intermediate crude oil for November delivery settled $1.27 or 2.8% in the red at US$44.43 a barrel.

Gold's heaviest fall in nearly three weeks sent the NYSE Arca Gold Bugs index down 5.47%. Gold for December delivery settled $13.90 or 1.2% lower at US$1,131.70 an ounce.

Zinc hit a five-year low and copper and aluminium their lowest points in a month. In London, copper shed 1.2%, aluminium 1%, lead 0.5%, nickel 1.1% and zinc 0.2%. Tin jumped 3.6%. US copper for December delivery was recently off 1.55% at US$2.25 a pound.

Spot iron ore for import to China yesterday retreated 20 cents to US$56 a dry ton.

The dollar was this morning buying 69.87 US cents.

TRADING THEMES TODAY

BACK INTO LINE: I'm still scratching my head about yesterday's extraordinarily foolhardy ASX rally, which continued despite flashing red lights at lunchtime. Short covering? Whatever it was, it gives us a bit of a cushion this morning, but it's still hard to see how we can avoid another look below 5000. Glencore's crushing debt burden is under the spotlight, which has analysts questioning the health of other commodity majors. US biotechs are in a bear market, helping to push the Russell 2000 index of small caps below the August low last night. All three major US equity indices ended the night firmly in correction territory. In other words, there are not a lot of positives this morning. If there is a plus for day traders, it is the resilience of the speculative end of the market, which sparked up again once it got over the August shock.

ECONOMIC NEWS: No significant domestic news scheduled today. Tonight's US highlights include consumer confidence, goods trade balance and house price index.

Good luck to all.