The ASX 200 has posted its biggest daily percentage fall on record, after coronavirus fears fuelled a steep sell-off that accelerated into the close.

ASX at Monday's close: The All Ordinaries index has lost 9.5 per cent to 5,058 points

The All Ordinaries index has lost 9.5 per cent to 5,058 points The RBA has flagged further policy measures, says it "stands ready to purchase Australian government bonds"

The RBA has flagged further policy measures, says it "stands ready to purchase Australian government bonds" The corporate regulator has put limits on the number of stock market trades large firms can make

The benchmark index closed down 9.7 per cent at 5,120 points on Monday, falling more than 2 per cent in the final minutes of trade.

"It is new territory, unfortunately it is a record you don't want," market analyst Evan Lucas from InvestSmart told The Business.

The ASX 200 is now down 30 per cent from its peak, posted just weeks ago on February 20.

The broader All Ordinaries ended 9.5 per cent down, its largest one-day fall since the 1987 stock market crash, losing $165 billion in value.

Just three stocks out of the top 200 eked out a gain: Fisher & Paykel Healthcare (+4.2pc), Telstra (+1.8pc) and Domino's Pizza (+0.2pc).

The big four bank stocks all lost more than 10 per cent, led by a 12.5 per cent fall for ANZ shares.

Energy stocks were hard hit, including Oil Search (-19.8pc), Santos (-17.7pc) and Woodside (-14.4pc).

The rout on travel-related companies continued, including Webjet (-22pc), Corporate Travel (-15.4pc) and Flight Centre (-15.8pc).

RBA 'stands ready' to pump more money into system

Meanwhile, the Reserve Bank of Australia has said it "stands ready" to pump more money into Australia's financial system to keep it functioning as global investors baulk at the coronavirus pandemic.

It issued a statement saying it would do what it must to keep Australia's financial markets operating.

"The Reserve Bank stands ready to purchase Australian government bonds in the secondary market to support the smooth functioning of that market," RBA governor Philip Lowe said.

The bond market is a key pricing benchmark for Australia's financial system.

The RBA said it will be announcing further policy measures on Thursday to support the economy.

The Australian dollar fell to its lowest level since the global financial crisis following the RBA's statement.

"We're so close now it's hard to rule it out dipping below 60 US cents," Westpac senior currency strategist Sean Callow said.

"The Reserve Bank has said for a long time it thinks it's very helpful to have a weak Aussie dollar."

Westpac now expects the RBA to cut the cash rate from 0.5 per cent to 0.25 per cent on Thursday.

Governor Philip Lowe said the central bank would be conducting one-month and three-month repurchase (repo) operations each morning "until further notice" to inject the system with extra emergency cash.

Loading

The bank would also conduct longer-term repo operations of six months' maturity or longer at least weekly, and for as long as necessary.

Under a repo arrangement, financial institutions can sell highly-rated debt securities to the RBA on the agreement they repurchase the security at a future time and with a pre-arranged price.

It is like a secured loan, with the difference between the purchase and repurchase prices representing the interest earned on the transaction.

"Financial regulators and the Australian Government are working closely together to help ensure that Australia's financial markets continue to operate effectively and that credit is available to households and businesses," Dr Lowe said.

The news comes after the US Federal Reserve slashed its interest rate by a full percentage point to nearly zero to help the world's biggest economy deal with the impact of the COVID-19 pandemic.

Economists from ANZ viewed the RBA's statement as part of its role in supporting the functioning of the market, rather than a formal announcement of quantitative easing (QE).

"Having said this, another rate cut and QE seem inevitable given the impact the extended measures to manage the spread of the coronavirus will have on the Australian economy," ANZ head of Australian economics David Plank said.

The Federal Government is already considering a second stimulus plan to support Australia's economy as global economic activity continues to deteriorate.

Prime Minister Scott Morrison will holding meetings with cabinet ministers in key sectors in preparation for tomorrow night's national cabinet meeting.

The Government is considering further economic support for businesses and households to cushion the impact of the increased emergency response measures it announced yesterday.

ASIC limits share trades amid record volumes

The corporate regulator has put new limits on the number of shares trades large firms can make, as it deals with a "significant backlog of work" due to a surge in stock market volumes.

"Australian equity markets have seen record trading volumes in the last two weeks," ASIC said in a statement.

"In addition to increasing volumes, Australia's equity markets have seen exponential increases in the number of trades executed, with a particularly large increase in trades last Friday."

The regulator said there was no disruption to trade on Friday, but there was unfinished work for the stock exchanges and traders to deal with over the weekend.

"If the number of trades executed continues to increase, it will put strain on the processing and risk management capabilities of market infrastructure and market participants," ASIC said.

Until further notice large stock broking firms and institutions will now be required to limit the number of trades they make each day by up to 25 per cent below the number of trades executed on Friday.

"We do not expect these limits to impact the ability of retail consumers to execute trades," the regulator said.