Australian shares fell by more than two per cent at noon on the back of a weak lead on Wall Street and fears China's economy could be slowing down.
The local bourse opened around 1.5 per cent lower after brutal sell-offs in European and US markets on Friday.
By 1200 AEDT shares had fallen further, with the benchmark S&P/ASX200 index 88.8 points, or 2.22 per cent, lower at 3,919.8, while the broader All Ordinaries index dropped 86.8 points, or 2.13 per cent, to 3,983.3.
IG Markets analyst Cameron Peacock said investors were trading off speculation about the Eurozone debt crisis, and ongoing fears that China's economic growth is slowing, which could hurt demand for local resources.
A contraction in China's manufacturing sector for a third straight month fed seller momentum on Friday, outweighing a surprisingly strong regional reading in the United States.
"When those fears come to the surface, we see a little bit of selling," Mr Peacock said.
"In recent weeks, the metals markets, in particular, are coming under quite a bit of pressure - copper, nickel and zinc - some of these industrial metals are getting hammered on talk and speculation that demand out of China is slowing and that's why we're seeing the materials and energy names being hardest hit today."
Every sector in the market shed value, but industrials and energy stocks felt the brunt of losses, down 2.6 and 3.07 per cent, respectively.
Energy stocks followed world oil prices on Friday down with Oil Search sinking 2.8 per cent to $5.50, Woodside Petroleum shedding 3.2 per cent to $31.43, and Santos down 3.6 per cent to $10.96.
Making news, ANZ fell 2.4 per cent to $19.05 as Australia's largest class action over its bank fees was set to go back in court on Monday.
Some 34,000 ANZ customers are taking action, claiming they were charged unfairly for late credit card payments and overdrawn accounts.
The weakest stock of the top 100 companies on the ASX was platinum group metals producer Aquarius Platinum, which plunged 8.8 per cent to $2.71.
The strongest stock on the same index, and one of only seven companies to add value, was medical diagnostics company Sonic Healthcare, which rose 1.3 per cent to $11.55.
Turnover was 392.01 million shares worth $969.79 million, with almost nine out of every 10 stocks falling.
On Friday, safe haven gold rose on lingering worries of a global economic slowdown, and the price of bullion notched its biggest quarterly gain of this year even after a sharp pullback from a record hit this month.
The spot price of gold in Sydney was $US1,627.85 per fine ounce, up $US4.15 from Friday's close of $US1,623.7.
The December share price futures index (SPI) fell 74 points at 3,926 points, with 18,380 contracts traded.
