The Australian share market has tumbled, with investors rattled by concerns about the spread of the coronavirus outbreak, and the selling could continue, with US futures sharply lower.

ASX at Monday's close (AEDT): The ASX 200 index lost 2.25 per cent, falling back below 7,000 points

The ASX 200 index lost 2.25 per cent, falling back below 7,000 points The energy sector hit its lowest level since October as crude oil prices fell on concerns the coronavirus outbreak will dent demand

The energy sector hit its lowest level since October as crude oil prices fell on concerns the coronavirus outbreak will dent demand CMC Markets strategist Michael McCarthy says the sell-off has "a lot of the hallmarks of the beginning of a correction"

All sectors of the local market closed in negative territory, with gold miners dominating the handful of stocks that ended higher.

The ASX 200 lost 2.25 per cent to 6,978 points — it's biggest one-day percentage fall since August — with consumer and energy stocks leading the losses.

Around $51 billion in value was wiped off the broader All Ordinaries index.

The energy sector fell 3.7 per cent to hit its lowest level since October, as crude oil prices fell on renewed worries the coronavirus outbreak could hurt demand.

Brent crude was down 2.5 per cent to $US57.07 per barrel.

Investors are concerned about the spread of the virus outside China, as Italian authorities scramble to contain new coronavirus COVID-19 infections in the country's north and South Korea has reported a jump in new cases.

"Markets had kind of settled on this idea that the issue was becoming contained by Chinese authorities," IG market analyst Kyle Rodda said.

"We've got this news that's unsettled market participants, volatility's spiked and it's resulted in this flurry of selling we've seen in the stock market today."

Spot gold prices surged 1.1 per cent to $US1,662.15 an ounce and gold stocks rose on the ASX, led by Saracen Minerals (+7.4pc), Newcrest Mining (+5pc) and Resolute Mining (+5.5pc).

About 4:15pm AEDT, the Australian dollar was buying about 66.1 US cents after earlier hitting 65.85 US cents, around an 11-year low.

'Broad-based dumping' as market falls from records

Mr Rodda said stock prices had become "divorced from fundamentals", leading to the US and Australian share markets hitting fresh highs in recent weeks.

"We've had this kind of situation playing out for a couple of weeks where people have just been ploughing into stocks and picking up stocks whatever their quality and characteristic," Mr Rodda said of the market ahead of today's "broad-based dumping".

"It's an evacuation out of stocks … it's really about getting rid of risk assets today, one of those panic-selling moments you get in markets every so often."

Stimulus from China's central bank in the form of interest rate cuts and liquidity injected into the market had helped to reassure traders in recent weeks.

"We had more of this upward momentum in stocks driven by policymakers rather than fundamentals," Mr Rodda said.

"When you're trading off policy and you've got valuations very, very high, you get these really pronounced movements to the downside when perceptions of risk change, so we're in that situation right now."

CMC Markets chief market strategist Michael McCarthy warned it could be a restless night for southern hemisphere traders, as global markets now gear up to digest the latest news on the virus.

By 4.15pm (AEDT), US stock market futures were down by 1.4 per cent, indicating heavy losses could be in store when Wall Street opens for trade.

"It looks like the selling we're seeing in the Asia-Pacific region today is likely to continue into the session in Europe and the US, which means we could see a continuation of the pessimism in trading tomorrow," Mr McCarthy told PM.

He said the market behaviour during Monday showed investors feared there could be worse to come in terms of the financial and economic fallout.

"It certainly has a lot of the hallmarks of the beginning of a correction," Mr McCarthy said.

BlueScope's China business 'heavily impacted'

A growing list of Australian and global companies have issued warnings about the direct hit they are taking from the spread of the coronavirus.

"We've had warnings now from companies all the way from BHP to Kogan to Cochlear to Apple — all of them talking about the potential impacts if this threat is not dealt with," Mr McCarthy said.

"The warnings are very clear, investors largely ignored them initially, but it looks like they're taking them much more seriously."

Shares in BlueScope fell 7.9 per cent, after the steel producer revealed a 70 per cent fall in first-half profit to $185.8 million, as a fall in steel prices reduced underlying earnings.

The steelmaker said most employees in its China businesses have returned to work and no cases of coronavirus COVID-19 have been reported among staff, however its Hubei sales office remains shut.

"As our BlueScope China businesses and their customer/supplier operations gradually return to normal levels during February, it is expected that February and March business performance will be heavily impacted," it said.

"The rate of recovery of the balance of the half year remains unclear at this point.

"Outside of China, we are aware of some impacts to our supply chains which, to date, have been mitigated. We continue to monitor the situation."

Shares in Reliance Worldwide nosedived 26.5 per cent after the plumbing and heating company downgraded its full-year profit guidance and warned of "particularly heightened" risks from coronavirus and Brexit negotiations.

"Achievement of earnings within the guidance range is contingent on no further material deterioration in trading as a result of theses factors," the company said.