The Australian share market has lost $56 billion in value, as a share price crash for global commodities giant Glencore raised fears about companies across the sector.

Despite carnage for local mining and energy stocks, nothing in Australia matched Glencore's near 30 per cent plunge in London overnight and a matching slump in Hong Kong on Tuesday.

Fears about the heavily indebted Glencore's ability to survive caused the rout in its share price and a surge in the cost of insuring its debt, leading many analysts to question whether this might be the commodity sector's Lehman Brothers moment.

Stockbroker Marcus Padley said the market scare on Glencore was based on an analyst report out overnight.

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"If current commodity prices continue, in other words there's no bounce from here, then they've effectively said Glencore and Anglo American have no value," he told the ABC's The World Today program.

"Every analyst will be going through Australian companies working out how much debt they have, much like everybody was looking for who's in debt during the global financial crisis."

IG market strategist Evan Lucas said Glencore may have as much as $US50 billion in debt, and markets seem to have twigged to the implications of that last night.

"It's all stoked fears about: a) China; b) around the future of commodities; and, c) what does that mean about the future of those who do have a high level of debt on their balance sheet going forward into the uncertain future," he told ABC News.

Top ten losers on the ASX 200: Paladin Energy -13.2%

Paladin Energy -13.2% Karoon Gas -11.1%

Karoon Gas -11.1% Origin Energy -10.4%

Origin Energy -10.4% AWE -9.2%

AWE -9.2% Santos -9.1%

Santos -9.1% Liquefied Natural Gas -9.1%

Liquefied Natural Gas -9.1% Whitehaven Coal -9%

Whitehaven Coal -9% Beach Energy -8.7%

Beach Energy -8.7% BlueScope Steel -8.1%

BlueScope Steel -8.1% M2 Group -7.5%

Glencore owns coal, zinc and copper mines in Queensland and New South Wales, and a nickel project in Western Australia.

Mr Lucas said Glencore may have to sell coal mines in Australia if commodity prices continue to fall.

"There is certainly a lot of theory and a lot of rumour out there that they are particularly one of the assets they are looking at selling out of," he said.

"High cost, lower prices certainly does not put those assets in a very good light and, also, whether they can find a buyer quickly is the very next question."

Glencore backed up its London slump with a 28 per cent fall for the company's Hong Kong-listed shares, leading the Hang Seng index more than 3 per cent lower.

Local sell-off gathers steam; All Ords breaks below 5,000 points

Locally, the market started deeply in the red, but losses only mounted as the afternoon wore on.

By the close, the benchmark ASX 200 index was down 3.8 per cent to 4,918 and the All Ordinaries was off 187 points to 4,958, cracking below 5,000 for the first time since mid-2013.

The share prices of major mining companies have slumped over the past year.

Reflecting resources sector concerns generated by Glencore, BHP Billiton shares tumbled below $22 for the first time since the global financial crisis.

The 'Big Australian' finished 6.7 per cent lower to $21.61, its lowest share price since the middle of the GFC in November 2008.

Rio Tinto was off 4.6 per cent, Fortescue 6.4 per cent, while South32 was down 5.8 per cent to $1.385.

Gold was no safe haven, with leading Australian producer Newcrest off 1.5 per cent to $12.55.

Black gold was even worse, with Oil Search off 3.5 per cent to $7.25, Origin down a whopping 10.4 per cent, Santos plunging 9.1 per cent to $4.28 — its lowest share price since 2000 — and Woodside down 5.8 per cent to $28.17.

However, the losses were not confined to resources.

Australia is a commodity dependent economy and fears of a looming recession saw the banks hammered - all four major banks were down over 3.5 per cent.

Tellingly for why the banks got hit so hard in the afternoon, Genworth Mortgage Insurance slumped 7.5 per cent as traders bet on rising Australian home loan defaults.

Retail was also down, with Woolworths and Wesfarmers both down more than 3 per cent, and Myer down 4.9 per cent.

However, outdoor retailer Kathmandu and socks, jocks and sheets seller Pacific Brands were two of the very few stocks rising on Tuesday up 2.4 and 0.7 per cent respectively.

The Australian dollar was also hit by the commodities rout, falling to 69.5 US cents.