The Australian sharemarket closed more than four per cent weaker, with losses in all sectors particularly among the major miners and energy stocks after Wall Street's lowest close since 2003.
The benchmark S&P/ASX200 index was down 146.7 points, or 4.19 per cent, at 3,352.9 while the broader AllOrdinaries index had shed 150.6 points, or 4.32 per cent, to 3332.6.
On the Sydney Futures Exchange at 1615 AEDT, the December share price index futures contract was down 134 points at 3,390 points on volume of 39,060 contracts.
Bell Potter senior adviser Stuart Smith said the majority of trade today consisted of forced sales.
"What I can see is that the distressed selling is continuing and at a greater rate than it has in the last three or four weeks," Mr Smith said.
"The market has absorbed A$4.2 billion of turnover today and most of that is distressed selling."
The mining giants were among the day's worst performers.
BHP Billiton fell A$2.10, or 9.05 per cent, to A$21.10 while its takeover target Rio Tinto gave up A$8.65, or 13.13 per cent, to A$57.25.
"It's forced selling. There can be no other reason," Mr Smith said.
"The market's trying to find an absolute floor. It will happen just as night follows day, but when is the story. It's just a matter now of having patience. This is the greatest test of patience I've experienced in 30 years."
