The Australian share market has fallen to a two-year low with equities and risk assets taking a hit from the US Federal Reserve sounding less dovish on future rate hikes than investors had expected.
The benchmark S&P/ASX200 index was down 74.8 points, or 1.34 per cent, at 5505.8 on Thursday, while the broader All Ordinaries lost 1.36 per cent per cent.
After being flat at lunch, the local market tumbled through the afternoon with banking and commodity-related stocks weighing heavily, while healthcare, tech, consumer discretionaries and industrials were all more than a per cent lower.
CommSec market analyst James Tao said Fed chair Jerome Powell's comments were short of what investors were hoping.
"The markets were probably anticipating a little bit more to relieve fears of a potential slowdown to the US economy and the global economic growth picture," he told AAP.
Mining stocks were the clear drag on the indices, suffering a sector-wide tumble of three per cent.
Benchmark BHP fell 2.6 per cent to $32.62 and Rio Tinto lost two per cent to $75.11, while BlueScope and South32 tumbled 7.4 and 4.8 per cent respectively.
Gold miners weren't spared either after subdued precious metals prices, with Northern Star, Saracen and St Barbara losing between 4.6 and 4.9 per cent.
The energy sector continued its weak recent run despite oil prices bouncing overnight.
Origin Energy led the losses for the sector, down 3.9 per cent to $6.21, while Oil Search and Woodside fell 1.2 and 1.7 per cent.
Three of the big four banks were up at noon but slid thereafter, with ANZ suffering the heaviest loss by close, down 1.6 per cent to $23.55, and Commonwealth the least, down 0.7 per cent to $68.92.
Consumer staples were only slightly lower thanks to Coles and Metcash lifting two and three per cent respectively.
Meanwhile, Genex Power shares were 10.4 per cent higher after the renewable energy generator secured funding to build a hydro energy plant in North Queensland.
Australia's jobless rate increased from a six-year low to a seasonally adjusted 5.1 per cent in November, despite market expectations the figure would remain unchanged.
The Australian dollar was another victim of the stifled risk sentiment associated with the US rate hike.
The Aussie was buying 70.91 US cents at 1630 AEDT, from 71.93 on Wednesday.
ON THE ASX:
* The benchmark S&P/ASX200 index was down 74.8 points, or 1.34 per cent, at 5505.8
* The All Ordinaries was down 77.1 points, or 1.36 per cent, at 5572.9
* At 1630 AEDT, the SPI200 futures index was down 100 points, or 1.81 per cent, at 5431.0
CURRENCY SNAPSHOT AT 1630 AEDT:
One Australian dollar buys:
* 70.91 US cents, from 71.93 US cents on Wednesday
* 79.58 Japanese yen, from 80.80
* 62.27 euro cents, from 63.19
* 56.13 British pence, from 56.82
* 105.32 NZ cents, from 104.77
GOLD:
The spot price of gold in Sydney at 1630 AEDT was $US1244.8 per fine ounce, from $US1250.90 on Wednesday.
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