5 things you need to know about the Australian share market today

Welcome to Friday. Here are the five things I'm looking at today on the Australian share market.

1. The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has dropped sharply below the 5500 level, losing 0.4% in opening trade to 5485.7, after US markets slumped overnight.
   The Dow Jones Index and the NASDAQ both fell 0.5%, while the broader S&P 500 closed down 0.6%, on the back of escalating political tensions between western nations and Russia. Fears are rising that the standoff will hurt the global economic recovery.
   As Ric Spooner from CMC Markets in Sydney told Bloomberg,

   "Confirmation that Russia will retaliate by imposing food-import restrictions is a negative for world markets."

   Russia has even imposed bans on food imports from Australia. At times like these, you might want to read a few of our articles (here and here) that show how you can prepare your portfolio for a significant market slide.

2. The Australian Financial Review (AFR) reports that UK regulators have banned their banks from issuing hybrid securities to ordinary retail customers, and Australia could follow suit. The big four banks are all lower in early trading today, with National Australia Bank (ASX: NAB), the biggest loser, down 0.7%. The banks also face the threat of being forced to split their operations.
3. REA Group Limited (ASX: REA) has reported a 36% surge in net profit, but the market doesn't like the result much. Shares are down 4.9%, showing that high P/E stocks can sink despite producing outstanding results, if they don't meet the potentially unrealistic goals of investors.
   It's an important point, and shows that the price you pay for a stock is very important, no matter the quality of the business.
4. Top Tweet of the day
   

   REA Group shares have opened 5% lower. OZ shareholders would have loved a real attempt to distribute more of those surplus franking credits.

   Stephen Mayne (@MayneReport) August 8, 2014

   Yes, Australian shareholders love their fully franked dividends.

5. Stock of the day comes from Owen Raskiewicz – Rio Tinto Limited (ASX: RIO).
   Owen bought shares in Rio a few days ago, committing $2983 of his own money to the mining giant's stock. In what looks like a case of excellent timing for Owen, Rio Tinto's shares shares are up 0.9% in morning trade, following a rock solid result released after market close last night. Owen still thinks the Rio Tinto shares remain firmly in the buy zone.

One more thing you might want to take a look at…