The Australian sharemarket closed more than 1 per cent lower, led by sharp declines in the banking and resources sectors.
The S&P/ASX200 index was down 76 points, or 1.62 per cent, at 4624.3, while the broader All Ordinaries index had fallen 77.7 points, or 1.62 per cent, to 4705.1.
Fallingstocks outnumbered those that managed a gain by three to one, as local market players reacted to steep losses on overseas markets amid nervousness regarding Ireland's financial position and backpedalling commodities prices.
Concerns that China would tighten its monetary policy to rein in inflation also weighed on the market.
The result was a sea of red among the blue chips, with just one stock on the S&P/ASX20 closing in positive territory - CBA edged up 1c to A$49.90.
The miners were hit hard, with Rio Tinto the worst performer on the S&P/ASX20 slipping 3.18 per cent, or A$2.75, to A$83.69.
Woodside Petroleum ended 2.87 per cent, or A$1.21, lower at A$40.95 while Newcrest Mining closed down 2.68 per cent, or A$1.10, at A$40. Macarthur Coal could only manage a 1c rise to A$11.41 after saying first half profit may triple in 2010/11.
