Every sector is down at least 1% with energy and financial stocks the standout losers.
In economic news, job ads have fallen for a second consecutive month with the ANZ job ads index falling 0.6% in August.
The falls over the last two months have been fairly modest, however, suggesting a soft patch for the local economy rather than a sharp contraction that will lead to a surge in unemployment.
In company news, Macarthur Coal has recommended that shareholders back a joint offer for the company from Peabody and ArcelorMittal which values the miner at $4.83 billion.
Macarthur said in their statement that the deal represented the best offer on the table for shareholders.
Around the region, Asian markets are also suffering heavy falls; the Hang Seng is down 2.2% whilst the Nikkei is down 1.7%.