The S&P/ASX 200 index was down 94.9 points, or 1.2 per cent, to 7,868.8 at midday on Thursday, with the broader All Ordinaries losing 102.5 points, or 1.25 per cent, to 8,103.
The steepest losses were felt across technology stocks, down 2.7 per cent to a five-week low, but all 11 sectors were lower.
US equities tumbled and endured their worst day in over a year, led lower by tech and mega-caps.
A few factors were driving weakness across Wall Street including valuations hitting frothy levels, the North American summer and the upcoming election, Capital.com senior financial market analyst Kyle Rodda said.
Soft inflation data a few weeks earlier and expectations of a Federal Reserve rate cut in September had also sparked a technical breakdown in big tech stocks, he said.
Softening price pressures in the flash purchasing manager index surveys continue to support the case for rate cuts in the US.
BHP was down 0.5 per cent, Fortescue had lost 4 per cent, and Rio Tinto had fallen 0.7 per cent.
The big banks were all lower, with Commonwealth Bank down 1.1 per cent, Westpac 1.6 per cent lower, NAB falling 1.2 per cent and ANZ losing 0.6 per cent.
An update from ANZ on investigations into alleged misconduct within its markets division revealed several employees had already been fired and suspended.Â
Shares in employment marketplace Seek had fallen 3 per cent following news the firm had written down the value of its Chinese marketplace Zhaopin by $141 million, in part attributed to a weaker-than-expected Chinese economy.
