Australian shares have lost $23 billion in early trade, following steep falls on Wall Street and across Europe.

Wall Street fell sharply, but recovered late, as investors fretted about global growth and worried about delays to a bailout review by Greece’s lenders.

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The benchmark ASX 200 index was down 1.6 per cent at 4,896 points by 10:13am (AEDT), while the All Ordinaries was 76 points lower at 4,947.

The market heavyweight banks and miners again led the major indices lower.

ANZ and NAB were both down 2.7 per cent in early market action, with Westpac off 2.4 per cent and the Commonwealth Bank losing 1.9 per cent to $74.92.

Regional institution Bank of Queensland slumped 5.3 per cent, while Bendigo and Adelaide Bank was down 3 per cent to $9.97 and investment bank Macquarie was off 2.5 per cent to $61.60.

The major miners were again a drag on the market: BHP Billiton was down 2.5 per cent to $15.96, Rio Tinto was 0.5 per cent lower, Fortescue down 1.9 per cent and South32 had fallen 3 per cent to $1.15.

In Athens, the stock index slumped 7.9 per cent, which hit sentiment across Europe and the US.

In New York, shares recovered from the day’s lows after a late rally among energy stocks.The Dow Jones Industrial Average finished 1.1 per cent lower at 16,027.

Investors also backed away from expensive tech stocks on fears of a global slowdown.

The tech-heavy Nasdaq tumbled 1.8 per cent to 4,284, while the S&P 500 fell 1.4 per cent to 1,853 having been down as much as 2.8 per cent at one point in trade.

Overnight, in London, the FTSE 100 lost 2.7 per cent to 5,689, the German DAX sank 3.3 per cent to 8,979, while France’s CAC 40 lost 3.2 per cent to 4,066.

The financial sector was a major loser, as big banks in both the US and Europe sank amid persistent worries about the pace of global economic growth.

Shares in Germany’s Deutsche Bank fell 9.5 per cent, while the country’s DAX is closing in on bear-market territory, down 21 per cent from a late-November high.

Westpac’s Imre Speizer said investors were generally keen to avoid any asset classes perceived as risky in overnight trade.

“Risk aversion helped demand for safe-havens, US 10-year interest rates falling to a 12-month low,” he wrote in a note.

“The rise in credit spreads, particularly in peripheral Europe, was one reason for the sour mood.”

Locally, shares are set for a dismal start, with the ASX SPI 200 has tumbled 1.3 per cent to 4,859.

Despite the carnage on equity markets, the Australian dollar had inched higher to 70.8 US cents shortly before 8:30am (AEDT).

It was buying 81.9 Japanese yen, 49.1 British pence, 63.2 euro cents and $NZ1.069.

On commodities markets, spot gold jumped 1.2 per cent to $US1,191 an ounce as investors sought the safe-haven commodity.

West Texas crude oil dropped 2.9 per cent to $US29.66 a barrel.