The Australian share market has resumed its downward spiral after only one day's respite as investors switch their focus from China to the United States.
The share market had traded eight sessions in a row lower since New Year's Eve, picked up on Wednesday, but headed south again on Thursday.
At one stage in morning trading, the Australian market was down well over two per cent.
But by 1130 AEDT, the local bourse was down around 1.4 per cent.
Stocks across the board, except for the safe-haven gold sector, were dumped, including the big banks and Telstra.
The plunge on the Australian market was sparked by widespread falls on Wall Street, where the S&P500 index sank 2.5 per cent to close below 1,900 points for the first time since September.
US investors were worried about falling energy prices, potentially disappointing corporate earnings and the global economy.
IG market strategist Evan Lucas said the big drop on US markets overnight and the large number of shares traded has investors asking questions about the strength of US equities rather than the strength of China's economy.
"Today's story is genuinely different to what's previously being going on," Mr Lucas said.
"What happened last night in the US markets is probably more the risk that we're seeing today rather than around China."
Investors were now asking whether the strong run upwards since 2008 by the global-leading US market could be sustained.
Investors were shifting their money away from shares and into bonds.
They were dumping anything linked to oil because the price of oil has been sinking rapidly.
Any stocks seen as risky were being sold off.
Investors were also worried about whether company earnings in the US were going to be squeezed by the strong US dollar and more possible interest rate rises by the Federal Reserve.
US stocks were viewed as over-valued.
Furthermore, investors were wondering if consumer spending and home loans are going to slow down in the US.
"All of that is what people are now grappling with," Mr Lucas said.
"We are now asking the question: Is the bull market in the US coming to an end?
"Last night may be a sign of that being a possibility."
Mr Lucas said the plunging oil price and the sharp decline in the value of oil stocks had made investors adverse to anything considered risky.
And the Australian share market, which has a strong exposure to emerging economies and US-dollar-denominated debt, is considered risky.
So, international investors were likely to sell out of Australian shares and go to something or somewhere considered safer.
Mr Lucas cautioned that what investors were considering in relation to the US right now was a forward-thinking view.
"It doesn't mean it will come to fruition. Markets are trying to grapple with what 2016 is going to look like."
