The Australian share market has lost almost $140 billion in Monday's trade, amid the economic fallout from the coronavirus and an oil price war.

Key points: Analysts have said this has been the worst trading day in Australia since November 2008

Analysts have said this has been the worst trading day in Australia since November 2008 The Australian dollar briefly dipped to 63 US cents — its lowest point since the GFC

The Australian dollar briefly dipped to 63 US cents — its lowest point since the GFC Oil stocks have fared the worst, while investors have turned to gold as a safe haven

At the same time, the Australian dollar briefly tumbled to just above 63 US cents — the lowest level since the global financial crisis — in what currency strategists have called a "flash crash".

Overall, it has been the worst day of trade since October 2008, when the GFC took a turn for the worse, and the rout is hammering share portfolios and superannuation balances.

The share market tumbled more than 5 per cent in early trade but plummeted again over lunchtime.

But stocks tumbled further at the close with the ASX 200 index losing 7.3 per cent or 456 points to close at 5,761.

That is a paper loss on Monday of $137 billion, with $413 billion lost since the market's record high on February 20 of 7,197.

The All Ordinaries index plummeted by 7.4 per cent or 465 points to end at 5,822.

British stocks had the biggest intraday fall since 2008 and benchmark bond yields turned negative for the first time on Monday.

London's commodity-heavy FTSE 100 was down 8 per cent, with shares of oil majors BP and Royal Dutch Shell both down almost 20 per cent.

The rapid spread of the coronavirus and a collapse in the price of oil have driven the latest big sell off on the Australian share market with oil stocks suffering huge losses.

Oil stocks are doing the worst after Saudi Arabia cut its official oil price because Russia failed to agree with oil producers' cartel, OPEC, on production cuts.

Commsec market analyst James Tao said the market saw its worst trading day since October 2008.

"As long as you see there are new cases of coronavirus, you will likely see uncertainty and weakness on the markets.

"The oil price war is also adding uncertainty as well. Volatility will remain the key theme on the markets."

On October 10, 2008, markets plunged in what was labelled as "Black Friday" when the start of fears of a global recession sparked drops in Asian markets and on Wall Street and the S&P 500 stock index fell nearly 8 per cent.

On that day, the All Ordinaries index had plunged 8.2 per cent to 3,940 — its biggest fall since 1987 when the stock market plummeted 25 per cent — and the ASX 200 dropped 360 points to 3,961.

'Flash crash' sees Australian dollar plummet

A "flash crash" is a fall caused often by technical issues. It can deepen losses because of the widespread use of computer generated trading across global share markets.

The Aussie dollar is falling because China, Australia's major trading partner, is at the epicentre of the coronavirus outbreak which has the global supply of products and services used by industry and consumers.

It is also falling because the Reserve Bank is expected to further cut interest rates to help boost the ailing economy.

Australia's economy is taking a multi-billion dollar hit from both the coronavirus and the bushfires. The RBA cut official rates to a new record low of 0.5 per cent last week.

Treasurer Josh Frydenberg worked to dampen fears about the market plunge, saying volatility was not uncommon.

"As you will be aware, there are many factors behind movements in equity markets," he said.

"And I note that some announcements by the Russians and the Saudis in relation to oil overnight, and we've seen a steep drop in the oil price in recent weeks.

"So there are a number of factors at play when it comes to the equity markets, but our financial system remains strong, our economy remains strong.

"This is a very different situation to what we saw through the GFC, which was essentially, a problem with the banking and the financial system and issues of liquidity.

"We haven't seen those same problems in relation to this health crisis. What we have seen is a supply and demand side constraints, and that's where our [stimulus] package will be focused."

Treasurer Josh Frydenberg said this was a "very different situation to what we saw through the GFC". ( ABC News: Ian Cutmore )

The ASX 200 is now at the lowest since January 2019, the quickest correction on record.

CMC Markets strategist Michael McCarthy said the stock market rout was far from over even though shares had fallen sharply from their record highs.

"Because at some stage in the future there will be a brighter outlook and a time to buy," he said.

"However, it doesn't look like that today given the heavy volume of selling and the damaging falls that we've seen."

Oil stocks have led the losses, with the ASX 200 index in the red across the board.

PNG-based oil producer Oil Search lost more than one third of its value to $3.30, while Santos lost 27 per cent to $4.89. The big banks saw big falls on the prospect of another cut in interest rates.

ANZ lost $20.27 or 8.5 per cent while the Commonwealth Bank fell 6.5 per cent.

Investors are turning to gold as a safe haven — Newcrest Mining jumped 2.54 per cent to $29.82.