Australia's benchmark index for shares and its currency have both hit new lows for the year as markets around the world adjust to the reality that interest rates are staying high for longer.
The S&P/ASX200 finished Wednesday down 53.2 points, or 0.77 per cent, to 6,890.2, while the broader All Ordinaries fell 58.8 points, or 0.82 per cent, to 7,082.2.
The ASX200 is now down 2.1 per cent for the year, closing at its lowest level since November 3.
"It's been a crescendo of losses for some, there's no two ways about it," Moomoo market analyst Jessica Amir told AAP.
"The Aussie share market is near a correction - we're down about in the order of eight per cent from the high."
The Australian dollar meanwhile had dipped 63 US cents several times, falling as low as 62.86 US cents at one point.
It was the first time the Aussie had dropped below 63 US cents since early November.
Ms Amir said Wednesday's sell-off in shares was prompted by the overnight release of United States jobs data known as JOLTS - the Job Opening and Labor Turnover Survey - which showed an unexpected rise in US job vacancies last month, supporting a hawkish narrative about keeping interest rates high for longer.
"It provided a shock to the system with markets rocked across the board," NAB senior FX strategist Rodrigo Catril said.
The S&P500 tumbled 1.4 per cent and the Nasdaq dropped 1.9 per cent following the jobs report, while US Treasury yields surged to a 16-year high of 4.8 per cent.
"You've got bonds paying five per cent in the US, and that is why money is coming out of equities," Ms Amir said.
"You can get five per cent yield with a boring bond, which is more than the major three US (stock market) benchmarks pay out in terms of yield, and it's more than the ASX200's average yield as well, so that's compelling."
Ms Amir noted major indices around the world, including in the US and the MSCI Asia Pacific benchmark, were now approaching correction territory.
"Financial markets are at the point where something is breaking," she said, but added it was possible the markets could "whipsaw higher" from here, just as they did in November.
Every ASX sector except utilities finished in the red, with the financial sector the biggest loser, dropping 1.5 per cent.
Westpac fell 1.5 per cent to $20.74, ANZ retreated 1.9 per cent to $24.92, CBA subtracted 1.6 per cent to $98.09 and NAB declined 1.7 per cent to $28.31.
In the heavyweight mining sector, BHP dropped 0.3 per cent to $43.72 and South32 fell 2.1 per cent to $3.34, although Rio Tinto rose 0.7 per cent to $113.62.
Core Lithium was the biggest loser in the ASX200, falling 6.0 per cent to 39.5c, as lithium prices drop on a lack of demand from strike-hit US automakers.
By 5.30 pm AEDT, the Aussie had rebounded slightly, buying 63.05 US cents, from 63.12 US cents at Tuesday's ASX close.
Across the Ditch, the Reserve Bank of New Zealand left interest rates on hold at 5.5 per cent, as had been universally expected.
But Barclays economists said the central bank's accompanying statement struck a slightly more dovish tone than its August statement, highlighting the downside risks to growth.
ON THE ASX:
* The S&P/ASX200 index finished Wednesday down 53.2 points, or 0.77 per cent, to 6,890.2
* The All Ordinaries dropped 58.8 points, or 0.82 per cent, to 7,082.2
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 63.05 US cents, from 63.12 US cents at Tuesday's ASX close
* 94.09 Japanese yen, from 94.57 Japanese yen
* 60.29 Euro cents, from 60.30 Euro cents
* 52.31 British pence, from 52.30 British pence
* 107.15 NZ cents, from 106.83 NZ cents
