The Australian share market has taken another dive, following more falls in China and a steep slide on Wall Street last week.

Share market futures were pointing to an 80-point slide at the opening of trade, and the market did not disappoint.

The benchmark ASX 200 index was off 2 per cent to 4,892 by 12:58pm (AEDT) on Monday – its lowest level since July 2013.

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The broader All Ordinaries index was 97 points lower at 4,953. All major sectors were in the red, but the steepest decline was for mining and energy stocks.

Resources giants BHP Billiton and Rio Tinto were both down steeply: BHP was off 5.6 per cent to $15.43, an 11-year low, while Rio was 4.7 per cent lower.

Smaller iron ore rival Fortescue was off 5.9 per cent at $1.6225.

Chinese authorities have been deflating the yuan slowly, causing periodic global market mayhem along the way. Photo: ABC

Energy stocks were also being sold off after further pressure on crude oil prices saw them touch 12-year lows, with Brent at $US32.84 a barrel.

Woodside Petroleum was down 3.6 per cent to $27.17, while Santos was off almost 7.1 per cent to $3.14 and Oil Search was 2.75 per cent lower.

Even Qantas, which usually gains on falling fuel prices, was off 2.6 per cent to $3.955 amid concerns about how the economic fallout might affect demand for air travel.

The major banks ahave not escaped the sell-off, with all four down between 1.8-2.1 per cent amid concerns about how China’s slowing economy and financial turmoil will affect Australia’s domestic economy and housing market.

Domestic mainstays such as Telstra, Wesfarmers and Woolworths were also down, 0.5, 1.1 and 0.6 per cent respectively.

Chinese shares were down in early trade, despite the People’s Bank of China leaving the yuan steady in today’s ‘fix’.

The CSI 300 was 1.1 per cent lower just after 1:00pm, while the Shanghai Composite Index was off 1.3 per cent.

Hong Kong’s Hang Seng was down 2.5 per cent.

Australian dollar breaches 70 US cents

The Australian dollar was also lower on a strengthening greenback, buying just 69.6 US cents.

However, HSBC Australia chief economist Paul Bloxham said that the local currency could have further to fall based on the weakness in the nation’s main exports.

“The Australian dollar is already sitting at a higher level than implied by its previous relationship with commodity prices,” he said.

“The current level of commodity prices implies an Australian dollar of 60-65 US cents may be closer to ideal.

“If the Australian dollar does not fall further, this could disappoint the RBA, forcing them to cut [interest rates] again.”

The US dollar has gained strength after an employment report on Friday showed that 292,000 extra jobs had been added to the economy in December, ahead of typical economist forecasts of 200,000.

That strength in the US domestic economy has raised the prospect that the Federal Reserve will be foreced to raise interest rates more quickly than many analysts had expected.

– ABC