What you need2know:

• SPI futures down 60 points at 5198

• AUD at 88.19 US cents, 95.30 Japanese yen, 69.65 Euro cents and 54.77 British pence

• S&P 500 -1.5%, Dow -1.6%, Nasdaq -1.6%

• In Europe, Euro Stoxx 50 -1.8%, FTSE -1%, CAC -1.8%, Dax -1.3%

• Spot gold up 0.3% to $US1211.16 an ounce

• Brent oil drops 0.7% to $US92.15 per barrel

Iron ore adds 1% to $US80.42 per metric tonne (out of Qingdao port)

What’s on today

US Federal Reserve meeting minutes; China HSBC services data; Japan BOJ monthly report; Bank of England credit conditions.

Stocks to watch

Glencore has abandoned a bid for Rio Tinto Group, and is barred for six months by UK law from making a renewed effort, after a July offer to create the world’s largest miner was rebuffed.

RBC Capital Markets has a “sector perform” on BHP Billiton and Citi Research holds a “neutral” recommendation with a $38 a share price target on the stock.

The following stocks will trade ex dividend today: 1300 Smiles, ARB Corp, Aurora Funds, BlackWall Property Funds, BlackWall Property Trust, NRW Holdings, Paragon Care.

Currencies

The US dollar fell against the yen for a second straight session, retracing most of its gains posted following last week’s robust US nonfarm payrolls report, but the decline came as no surprise after five straight weeks of rises.

The dollar index, which measures the greenback’s value against a basket of six major currencies, extended Monday’s dramatic drop, which was its biggest one-day decline since January. The index fell 0.3 per cent to 85.693 after rising to a four-year high on Friday.

Dutch lender Rabobank has placed two senior London-based foreign exchange traders on paid leave following an internal investigation into the bank’s currency trading practices.

FXCM market analyst, David de Ferranti, says that while AUD/USD faces a less-than-supportive fundamental backdrop a consolidation for the pair should not be precluded.

Commodities

Nickel rose for a third day as investors bet that long-awaited shortages would finally begin to hit the market in coming months. Nickel has shed 29 per cent since touching a 27-month peak of $US21,625 a tonne in May.

RBC Capital Markets reports the uranium spot price down $US1.00 to $35.50 a pound with TradeTech down $US0.90 to $US35.60 a pound.

A European Union plan to label Canadian tar sands oil as highly polluting as part of its fight against climate change has been abandoned after years of opposition from Canada, clearing the way for exports of tar sands crude to the European market.

United States

US stocks are lower in afternoon trade as weak data out of Germany added to concerns about possible headwinds to corporate outlooks ahead of the start of earnings season. Declining issues were outnumbering advancing ones on the NYSE by 1971 to 1009, for a 1.95-to-1 ratio on the downside.

Shares of Coca-Cola Co rose to their highest level since 1998 on Tuesday, bucking the downward trend of the broader market. The beverage giant rose 0.7 per cent to $US43.90, moving within a dollar of its all-time intraday high of $US44.44, hit on July 15, 1998.

Twitter has sued the US Department of Justice, intensifying its battle with federal agencies as the internet industry's self-described champion of free speech seeks the right to provide more specifics about the extent of US government surveillance.

Europe

European stocks have sunk as the IMF cut the eurozone growth outlook and German industrial output slumped, with market sentiment also shaken by Europe’s first home-grown case of Ebola.

German industrial output shrank a massive 4.0 per cent in August, after rising by 1.6 per cent in July. The biggest monthly decline in more than five years fuelled concern over the health of Europe’s top economy.

Spain’s IBEX 35 plunged 2.0 per cent as the government confirmed that a 40-year-old nurse contracted the Ebola virus while treating patients in a Madrid hospital, and did not check herself in for five days despite showing symptoms.

What happened yesterday

In a dramatic session on Tuesday, the local sharemarket posted its biggest intraday swing of the year as bank stocks oscillated wildly and Rio Tinto rallied. The turbulence came despite the October meeting of the Reserve Bank of Australia delivering no surprises in its interest rates decision.

The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index each dipped 0.2 per cent, on Tuesday to 5284.2 points and 5284.8 points respectively, after pushing as much as 1.6 per cent lower in the morning.