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SYDNEY - The Australian share market closed 2.7 per cent lower after a sell-off on the Chinese stock exchange sent shockwaves around the globe.
On Wall Street, the benchmark S&P's 500 Index suffered its biggest one-day fall in almost four years, as investors dumped stocks exposed to Chinese demand following an almost nine per cent decline on China's Shanghai Composite Index.
Fears the Chinese government would halt speculative investment, a factor pushing some stocks to record highs, sparked the decline.
At the 1615 AEDT close, the benchmark S&P/ASX200 index was down 161.3 points, or 2.69 per cent, to 5,832.50, after falling as much as three per cent during the day.
The all ordinaries tumbled 161.1 points to 5,816.50.
On the Sydney Futures Exchange, the March share price index contract plummeted 174 points to 5,824 on a volume of 49,112 contracts.
Austock Brokers senior client adviser Michael Heffernan said the market had a bit of a sore-tooth day but it was expected to be short-lived.
"This sort of day is a day when you're looking to buy rather than looking to sell," Mr Heffernan said.
"I think our market will be (up) about 10 per cent this year, so we're going to be zig-zagging on the way to get there, and we'll have our ups and we'll have our downs.
"But fundamentally, the economy's in great shape and that puts a concrete floor under the performance of our market."
In the US overnight, the Dow Jones industrial average plunged 416.02 points, or 3.29 per cent, to 12,216.24, while the S&P/500 fell 50.33 points, or 3.47 per cent to 1,399.04.
The big miners took a walloping, BHP Billiton dropping A$1.72 to A$27.13, as rival Rio Tinto plunged A$4.01 to A$75.60.
Woodside Petroleum fell A$1.04 to A$37.26, as fellow oil producer Santos slid 31 cents to A$9.36, and Oil Search lost 21 cents to A$3.54.
Among the banks, Commonwealth Bank sank 70 cents to A$49.96, National Australia Bank fell 32 cents to A$40.36, Westpac was down 54 cents to A$25.46, and ANZ dropped 42 cents to A$29.30.
Woolworths provided a rare bright spot, rising 46 cents to A$27.20, a day after releasing a bumper first-half result.
Rival grocery chain Coles receded 26 cents to A$15.36 and Harvey Norman, the furniture and consumer electronics retailer, dipped six cents to A$4.35.
Harvey Norman today reported a first-half net profit of A$180.5 million, up more than one third on the same time a year ago.
Household and electrical product seller Housewares International dipped one cent to A$2.47 after the takeover target posted a A$29 million loss for the first half.
Among other companies to report, property giant Lend Lease declined 36 cents to A$18.05 after posting a broadly flat interim net profit.
Energy infrastructure group Alinta, which was formed from the merger of the infrastructure assets of AGL and Alinta, reported a near 26 per cent fall in annual profit.
Alinta fell 20 cents to A$14.25.
Macquarie Media Group shrank 23 cents to A$4.59, despite reporting a big jump in first half net profit to A$38 million.
Telstra edged back seven cents to A$4.26 and the T3 instalment receipts slid six cents to A$2.83.
Singapore Telecommunications, the owner of rival telco Optus, was 17 cents lower at A$2.60.
The spot price of gold in Sydney was USA$670.90, down USA$14.75 on yesterday's close.
Among the gold miners, Newcrest tumbled A$1.32 to A$22.55, Newmont fell 33 cents to A$5.61 and Lihir Gold was down 14 cents at A$3.32.
The top traded stock by volume was Jervois Mining, with 122.05 million shares worth A$3.42 million changing hands as shares in the company fell 0.3 cents to 2.9 cents.
Preliminary market turnover was 2.78 billion shares worth A$9.23 billion with 161 stocks rising, 1,275 falling, and 228 unchanged.
- AAP