The Australian share market has had $60 billion wiped off the value of its shares in the worst one-day drop since the Global Financial Crisis, more than six years ago.

The market finished the day more than four percent lower than when it started, the fall having accelerated as soon as Asian markets opened.

Shanghai’s market lost 11.5 percent last week, and plunged a further eight percent today.

The benchmark S&P/ASX 200 and the All Ordinaries indices fell more than 2.4 per cent within the first 20 minutes of trade today.

Among the major banks, Commonwealth Bank fell $3.12 to $72.47, ANZ dropped $1.43 to $26.91, National Australia Bank reversed $1.45 to $29.71, and Westpac retreated $1.92 to $29.45.

In the resources sector, global miner BHP Billiton surrendered $1.21 to $22.89, and Rio Tinto gave away $2.55 to $46.97.

Fortescue Metals plunged 28 cents, or 14.62 percent, to $1.635 after the iron ore miner suffered an 88 percent slide in its full year profit.

Oil and gas producer Woodside Petroleum dumped $1.56 to $30.00, and Santos was off 63 cents at $4.97.

However steelmaker Bluescope Steel lifted 29 cents, or 8.58 percent, to $3.67 after it announced an annual profit of $136.3 million, up from a loss of $82.4 million a year ago.

Telstra lost 19 cents at $5.88, and Medibank Private eased two cents to $2.26.

The tumbles came after a torrid session on Wall Street last week when the Dow Jones Industrial Average lost more than 1000 points and the S&P 500 fell below 2000 points for the first time since January 30.

As well as renewed fears about China's economy and a possible exit from the eurozone by Greece, investors were also unsettled by US oil prices which on Friday dipped below $US40 for the first time in six years.

The ASX plunged by $60 billion in one day of trade today. (AAP stock)

CommSec chief economist Craig James said that despite the uncertainty on global markets, the US and Australian economies remained in good shape.

He also believed worries about Greece and China were over-rated.

"At present, we would view the global sharemarket correction as a correction we had to have - a situation that will be beneficial in injecting more value into markets," Mr James said.

"There are clearly risks, but the data indicates that US and European economies continue to recover; lower oil prices will serve to boost consumer and business spending; and Chinese authorities are trying a range a measures to maintain momentum in their economy."

Treasurer Joe Hockey said that while markets will go up and down, the fundamentals were still good for the global economy, particularly the US.

He said several factors would cause volatility in the markets in the next few months, particularly any decision by the US Federal Reserve to move on interest rates in September.

"If they do increase their interest rates, then you will see movement of money from equity markets, probably into bond markets," he said.

He said such volatility would hit confidence in Australia and that's why the government had to keep reminding people that their economy is one of the fastest-growing in the world right now.

KEY FACTS

• At 4.20pm AEST on Monday, the benchmark S&P/ASX200 index was down 213.3 points, or 4.09 percent, at 5001.3 points.

• The broader All Ordinaries index was down 210.6 points, or 4.03 percent, to 5014.2 points.

• The September share price index futures contract was down 214 points at 4954 points, with 68,000 contracts traded.

• National turnover was 2.49 billion securities worth $8.06 billion.