The Australian Stock Exchange is facing another tough day, as world markets reel amid fears of a United States-sparked recession.
Overnight, major European markets recorded their worst losses in more than six years, and the US futures market plunged.
An economic stimulus package announced by President George W Bush at the weekend is being seen as too little, too late to stem the tide against a US housing downturn and the subprime mortgage crisis.
The main American financial markets have been closed for the Martin Luther King Junior holiday.
Ahead of the weekend, New York's Dow Jones industrial average had finished 60 points lower at 12,099.
Overnight, in a shortened session, the US futures market plummeted in anticipation of big losses when Wall Street reopens.
On the Chicago Mercantile Exchange, the Dow Jones industrial average futures plummeted 546 points or 4.5 per cent.
There were similar falls overnight on European stock exchanges.
The markets in London, Paris, Frankfurt and Madrid suffered their biggest losses since the 2001 terrorism attacks on the US.
The British market slumped 5.5 per cent.
London's FT-100 index shed 324 points to 5,578.
Yesterday, the Australian market continued its longest losing streak in a quarter of a century.
The All Ordinaries index dropped another 169 points to close at 5,631, and extending the decline to an 11th consecutive session.
The big banks and miners were among the casualties.
BHP Billiton was down $1.51 to $33.29, and Commonwealth Bank shares tumbled $2.42 to $50.78.
Overnight trade on the Sydney Futures Exchange had a shortened session due to the holiday in the US.
The Share Price Index 200 contract closed down 158 points at 5,438 - a slide of 2.8 per cent.
The 10-year bond contract was up seven points at 94.06, with the implied yield easing to 5.94 per cent.
On foreign exchange markets, risk aversion sent the Australian dollar sharply lower.
Shortly before 6:00am the local currency was being quoted at 85.99 US cents, a drop of more than 1.5 cents on yesterday's local close.
On the cross-rates it was at 0.5954 euros, 91.22 Japanese yen, 44.24 pence sterling, and against the New Zealand dollar it was at 1.153.
The gold price was quoted at $US866.35 an ounce.- Source: By Australian Broadcasting Corporation
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