Apple's worst trading day in six years sparked a sell-off in global markets, but local shares shook off most of that negativity by the close of trade.

The benchmark ASX 200 finished 0.4 per cent lower at 5,613, after falling by a steeper 1.1 per cent earlier in the day.

The broader All Ordinaries index slipped by a similar level to 5,671 points, and also minimised its earlier tumble.

Since its recent peak in late-August, the local market has plummeted by about 12 per cent — as investors grow increasingly concerned about an unresolved trade war, slowing global economic growth and the United States raising interest rates too quickly.

"Sentiment is as bad as I've seen it for a long, long time … the negativity is absolutely rife," Chris Weston, head of research at Pepperstone, said.

"Ultimately, the market is concerned if we do see a resolution between those two nations [the US and China] … the damage has actually been done to the global economy and we're hurtling towards a recession."

"Equities is a confidence game, and if it goes down in China, Japan, Europe and the US, we are going down as well — there's no doubt about that situation."

Stock markets across the Asia-Pacific had a mixed performance.

Japan's Nikkei lost 2.8 per cent on its first day of trading in the new year— an improvement over its earlier drop of 3.3 per cent.

The best performers were the Shanghai Composite (+1.8pc) and Hong Kong's Hang Seng index (+1.3pc).

New Zealand's NZX 50 (+0.1pc) and South Korea's KOSPI (+0.6pc) are trading higher, after reversing its earlier losses.

Pessimistic global forces

Apple's rare profit downgrade caused its share price to plunge 10 per cent, and was the latest trigger for the market meltdown.

The world's largest technology company warned investors first-quarter earnings would be 10 per cent lower than expected because of poor sales in China.

Apple chief executive Tim Cook blamed the slowing Chinese economy and, "rising trade tensions with the United States".

Sorry, this video has expired Apple CEO says trade tensions between US and China is cause for steep slide in stocks

Market sentiment also worsened after the US, China and European Union released worse-than-expected factory figures earlier this week.

Their figures all showed manufacturing activity — namely their purchasing managers indices (PMI) — had fallen to their lowest levels in around two years.

These were further signs America's tariffs on foreign steel and aluminium and the billions of dollars in US-China tit-for-tat tariffs were inflicting pain on the world economy.

It also caused the Australian dollar to plummet to a 10-year low of 67.3 US cents on Thursday.

However, the dollar had rebounded to 70.22 US cents at 4:15pm (AEDT).

Heavy losses in several sectors

Mr Weston said CoreLogic's latest housing market figures contributed to the negative sentiment in the Australian market — in addition to the weak US, China and European manufacturing figures.

It revealed national property values had slumped 5.2 per cent since their peak in October 2017.

"This is the worst fall we've seen since the GFC [global financial crisis], which was a short and sharp correction, down about 5 per cent from peak to trough," CoreLogic's head of research Tim Lawless told ABC News.

Technology (-2.1pc), consumer staples (-1.4pc) and industrials (-1pc) being the weakest performing sectors — while utilities (+1.9pc) and energy (+1pc) were the best performers.

Nine (-3.3pc), Graincorp (-2.2pc), AMP (-2pc), and Coles (-1.5pc) were some of the big-name stocks sustaining heavy falls.

Mining giant BHP (-0.8pc) drastically narrowed its losses, while Rio Tinto (+0.2pc) rebounded to enter positive territory.

Also having a significant impact were the big four banks which were performed, after recovering from steeper losses earlier in the session.

Commonwealth Bank (+0.1pc) and NAB pushed slightly higher (+0.2pc), while Westpac was flat and ANZ lost 0.4 per cent.