The sharemarket has continued its trend of heavy moves, slumping nearly 2 per cent on renewed fears of a slowing in China and soft domestic retail figures.
The benchmark S&P/ASX 200 Index fell 89.9 points, or 1.9 per cent, to 4744.1. The All Ordinaries lost 82.5 points, or 1.7 per cent, to 4727.8. This follows a 1.9 per cent drop on Monday and a 2.6 per cent surge on Tuesday on the ASX 200.
Bell Potter director Andrew Bell said the market had "passed through the confession season for companies".
With reporting season approaching next month, investors have been reacting mainly to economic news and speculation.
All major sectors slid on Wednesday, with materials taking the biggest hit, down 2.7 per cent.
An official survey of China's services sector dropped to a nine-month low, with a reading of 53.9. A mark above 50 indicates expansion.
Mining stocks suffered the most, with BHP sliding 3.2 per cent to $31.05. Rival Rio Tinto dropped 3 per cent to $51.50.
Shares were also licking their wounds as overseas investors looked to cut their losses as the dollar continued to weaken.
Mr Bell said a move for the dollar under US90¢ was imminent, given commentary from the RBA.
"If that is orderly, equity markets could be orderly. But if there was a sense of panic or quick movement from the currency, you could well see a flow-through effect into other asset classes," Mr Bell said.
Any negative implications on equities would be temporary, however, with companies that had struggled to manage with the high dollar getting some reprieve, he said.
In late trade, the dollar fell to a 34-month low of US90.58¢.
Also weighing on the market was data showing retail sales remained soft in May. Seasonally adjusted retail sales lifted 0.1 per cent in May, falling short of economist expectations of a 0.3 per cent rise. Revised-down numbers for March and April also spooked investors.
Wesfarmers was one of the biggest losers, falling 2.6 per cent to $38.68. Woolworths lost 2 per cent to finish at $32.27. Westpac shed 2.6 per cent to $27.67 and ANZ slipped 2.1 per cent to $27.87. NAB was down 1.8 per cent at $28.72, while Commonwealth Bank inched 0.5 per cent lower to $68.53.