Australian shares have had their worst session since early June as stubborn oil prices, crumbling consumer confidence and a dim business outlook weigh on banks, real estate and retail stocks.
The S&P/ASX200 tumbled 90.1 points on Tuesday, down one per cent, to 8,920.8, as the broader All Ordinaries lost 86.3 points, or 0.94 per cent, to 9,114.3.
Financials, IT stocks, real estate trusts and both consumer-facing sectors lost between 1.3 and 1.9 per cent as Westpac and NAB's consumer and business confidence surveys turned lower.
Adding to the list of headwinds, HSBC downgraded its housing market outlook and now tipped a 13 per cent decline in what would be Australia's biggest housing price downturn in modern history.
The local market had suffered a rough session, and was now trading at its lowest value since July 28, IG market analyst Tony Sycamore said.
"We are now just a week and a bit away from a potential (US) Fed rate hike, then we had a pretty dire batch of consumer confidence data come out today, and hawkish talk from the Reserve Bank," Mr Sycamore told AAP.
"It's piled some misery on the ASX200, and then you've had the Chinese state buyer coming out and saying, 'No more buying of Rio Tinto's iron ore', just when the price is pushing back above $US100 a tonne."
Energy and utilities, along with traditionally defensive health care stocks made up the only sectors to improve, as Brent crude topped $US98 a barrel for the first time in seven weeks as the Iran conflict dragged on.
Concerns about diesel prices hit the raw materials sector, as BHP and Rio Tinto sold off despite LME copper futures hitting record highs.
Gold prices traded steady just above $US4,405 ($A6,106) an ounce, while iron ore futures held above $US100 a tonne for a second day.
Despite the tough session for local miners, the sector was well-positioned for a longer-term boom, Global X ETFs investment strategist Justin Lin said.
"Stronger commodity prices are likely to be a feature, rather than a bug, of an increasingly de-globalised and volatile global economy," he said.
"In that environment, producers should be among the key beneficiaries."
In company news, Santos will increase its stake in the huge Papua LNG gas project, taking its total interest to 21 per cent for a cool $262 million.
BlueScope, News Corporation, Regis Healthcare and Mineral Resources went ex-dividend, with CSL, Northern Star and Brambles to lock in their shareholder payouts on Wednesday.
The Australian dollar is buying 72.11 US cents, down slightly from 72.15 US cents on Monday at 5pm.
ON THE ASX:
* The S&P/ASX200 fell 90.1 points, or one per cent, to 8,920.8
* The broader All Ordinaries lost 86.3 points, or 0.94 per cent, to 9,114.3
One Australian dollar trades for:
* 72.11 US cents, from 72.15 US cents at 5pm AEST on Monday
* 110.87 Japanese yen, from 112.45 Japanese yen
* 62.05 euro cents, from 62.12 euro cents
* 53.27 British pence, from 53.34 pence
* 123.17 NZ cents, from 122.80 NZ cents
