Australian financial markets experienced another brutal session on Thursday with equities, the Aussie dollar and longer-dated government bonds all selling off sharply despite attempts from the Reserve Bank of Australia to quell investor concerns about a potential deep recession.

On the local sharemarket, the benchmark S&P/ASX 200 slumped another 170.3 points, or 3.4 per cent, to 4782.9, closing at the lowest level since February 2016.

From the record highs in late February the index has now skidded 33.54 per cent.

The Aussie dollar, government bonds and equities were all slammed on Thursday. Credit:Louie Douvis

Having surged as much as 3 per cent in early trade, the benchmark index quickly reversed into negative territory and kept on going down, undermined not only by recession fears but also by a sharp lift in longer-dated Australian bond yields. The RBA announced it will begin buying government bonds from Friday with the aim of capping three-year yields at 0.25 per cent.