Australian shares have slumped to five-and-a-half-week lows, wiping out more than $30 billion, as investors sell out across major sectors on global fears that Britain may exit the European Union.

Key points: Shares among the big four banks have lead the losses

Shares among the big four banks have lead the losses The ASX 200 tumbled 2 per cent to 5,209, while the All Ordinaries also slumped 2 per cent to 5,288

The ASX 200 tumbled 2 per cent to 5,209, while the All Ordinaries also slumped 2 per cent to 5,288 The ASX 200 is on track to post the biggest one-day percentage loss since February

The move followed overnight leads, after Wall Street fell for a third straight session, while European shares hit a three-month low.

Shares among the big four banks led the losses: the Commonwealth Bank of Australia lost 2.7 per cent to one-and-a-half-month lows of $73.45, while Westpac tumbled 2.4 per cent.

"The fragility of global markets has been exposed over the last few sessions," said Gary Huxtable, client adviser at Atlantic Pacific Securities.

"The impending uncertainty surrounding a potential Brexit is definitely dominating investors' thinking at the moment. Brexit has managed to unwind weeks of moderate gains and more recent consolidation in the markets."

At 3:16pm AEST, the ASX 200 tumbled 2 per cent to 5,209, while the All Ordinaries also slumped 2 per cent to 5,288.

The ASX 200 is on track to post the biggest one-day percentage loss since February.

Bluechip stocks also drifted lower: mining giant BHP Billiton dumped 2.7 per cent to two-week lows of $18.29, while rival Rio Tinto dropped 1.5 per cent.

Telecommunications provider Telstra slumped 1.7 per cent to $5.36, its lowest since late April.

Investors seek out gold companies

The only stocks to tick higher were gold companies, as investors sought the safe-haven metal.

Regis Resources gained 4.5 per cent, while Newcrest Mining climbed 1.4 per cent.

The local sharemarket has been steadily gaining ground since April after a dismal start to the year, but uncertainty over when the US Federal Reserve will raise rates and fears of a Brexit has escalated selling.

Commodity prices have also weighed on investors minds, with iron ore, coal and oil slumping, though a recent modest recovery has helped bolster sentiment.

Analysts warned there would be short-term weakness in the market.

In a report, National Australia Bank said it expects sub-par growth of around 3 per cent for the global economy through the remainder of the year.

"The different settings of monetary policy across the big economies reflects their disparate economic challenges," NAB said.

"The Fed still looks set to lift its policy rate twice again in the second half of the year, although the latest disappointing jobs figures mean July or even September are more likely candidates for the first raise than June."

The Australian dollar is modestly higher at 73.8 US cents.