Aussie sharemarket hits bear territory after Wall St rout

Australian stock have fallen sharply in the opening minutes of trade. Photo / AP

The Australian share market fell by 3.8 per cent in the opening minutes of trade, following the trend set in major offshore markets.

At that level, Aussie stocks are officially in bear market territory, the benchmark S&P/ASX200 index having fallen by 22 per cent from its record high of 7162.5.

By 12.53 pm the Australian market had bounced off its lows, with the index being 0.5 per cent weaker.

Shares in Qantas dropped by 6 per cent to A$3.90 after the national flag carrier announced drastic capacity cuts.

Energy stocks continued to fall in response to the sharp decline oil prices, Woodside dropping 3.5 per cent to A$20.789 and Santos falling 2.5 per cent to A$4.77.

The US market, which closed at 10 am NZT, finished 7.8 per cent down as measured by the Dow Jones Index. Britain's FSTSE100 fell 7.7 per cent and Germany's DAX dropped by 7.9 per cent.

World markets continue to be extremely volatile on the back of a slump in oil prices and the rapid spread of the coronavirus.

Qantas shares were down 5.9 per cent after announcing drastic capacity cuts and Virgin Australia shares have lost 12.5 per cent.