Bargain hunters move in as ASX200 falls below 5000

THE ASX 200 has dropped below 5000 points for the first time since July 2013, but the early falls are much milder than futures trading suggested.

Fairfax reported the benchmark index was 60 points lower at 4941.2, down by 1.2 per cent, while the All Ords was 66 points lower at 4948.4.

Miners in particular are showing resilience. BHP is only 0.6 per cent lower and Rio has actually gained 0.7 per cent. Fortescue is only a little lower.

The ABC reported that some major Australian blue chip companies which were hammered yesterday have actually bounced today, as 'bargain hunters' move in to pick up stocks.

Westpac, which slumped more than 6 per cent yesterday, was up 1.3 per cent at $29.82, with the other major banks swinging between moderate losses and gains.

BHP Billiton spin-off South32 jumped 3.9 per cent gain to $1.46 after slumping 7.6 per cent yesterday.

The big test for Australian stocks will come when Chinese share markets open at 11:30am (AEST).