Aust stocks sink at open

Local market follows Wall Street lower after weak China, US data see US stocks close more than 2% in the red.

The Australian stock market opened sharply lower, falling more than 1% in early trade, after Wall Street closed more than 2% lower on weaker manufacturing data out of the United States and China.

At the 1015 AEDT official market open, the benchmark S&P/ASX200 index fell 1.34% to 5,118.6 points, while the broader All Ordinaries index declined 1.33% to 5,132.9.

Data earlier showed that China's purchasing managers index for manufacturing, fell to 50.5 in January from 51.0 in December and 51.4 in November.

The Institute for Supply Management reported that US manufacturing activity fell sharply in January, sinking to 51.3 from 56.5 in the previous month.

At the closing bell, the Dow Jones Industrial Average declined 326.05 points, or 2.08 per cent, at 15,372.80.

The S&P 500 shed 40.70 points, or 2.28 per cent, to 1,741.89, while the Nasdaq Composite Index declined 106.92 points, or 2.60 per cent, to 3,996.96 points.

"This is the beginning of the correction that we have been waiting for," Peter Cardillo, chief market economist at Rockwell Global Capital, said.

In economic news on Tuesday, the Reserve Bank of Australia holds its monthly board meeting and makes its interest rate decision.

In Australia, the market on Monday closed flat due to a slow start to the local earnings season and holidays in Asia.

The benchmark S&P/ASX200 index was down 2.1 points, or 0.04%, at 5,187.9.

The broader All Ordinaries index was down 3.2 points, or 0.06%, at 5,201.9.

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