Australia’s share market has plunged more than two per cent after investors in the US continued to sell technology giants’ stock and sent the Nasdaq into correction territory.

The S&P/ASX200 benchmark index had lost 138.4 points, or 2.3 per cent, at 5869.4 at 1200 AEST on Wednesday.

The All Ordinaries index was down 138.7 points, or 2.24 per cent, to 6051.5.

Financials were down 2.95 per cent and materials dropped 1.47 per cent.

However, the biggest losers were energy companies, down 3.92 per cent, and those in IT, lower by 3.58 per cent.

US stocks closed lower for a third straight session earlier as investors turned on the likes of Apple, Amazon, Facebook and Tesla.

Tech stocks had been the darlings of Wall Street on expectations they can continue to deliver profit growth regardless of the economy and coronavirus pandemic.

But critics have been saying big technology stocks had shot too high.

The Dow Jones Industrial Average fell 632.42 points, or 2.25 per cent, to 27,500.89, the S&P 500 lost 95.12 points, or 2.78 per cent, to 3,331.84 and the Nasdaq Composite dropped 465.44 points, or 4.11 per cent, to 10,847.69.

Another possible weight on Australian investor sentiment was news AstraZeneca and Oxford University have suspended a late-stage study of a coronavirus vaccine.

One participant experienced a serious adverse reaction. An independent committee will review the unexplained illness before the trial resumes.

Australia is hoping to gain early access to 3.8 million doses of the vaccine for distribution in January.

There was better news in the monthly Westpac-Melbourne Institute consumer sentiment index, which surged 18 per cent in September after dropping 9.5 per cent in August.

This recovery came despite confirmation last week the nation is in recession for the first time since 1992.

However, ThinkMarkets analyst Carl Capolingua said it was worth considering the figures with the soft business confidence figures from NAB on Tuesday, which showed hiring was weak.

“It’s hard to get too excited about the recovery yet,” he said.

The ASX200 rose to 5898.9 points shortly after the consumer sentiment index was published, then eased.

There was also good news in lending figures. Australian Bureau of Statistics figures showed the value of new loans for owner-occupied housing jumped 10.7 per cent in July, the largest month-on-month on record.

First-time home buyer loans also surged 1.4 per cent.

The bureau put this strong demand for credit down to the easing of COVID-19 social distancing restrictions in most states and territories.

However, the big banks could not avoid the gloom of investors. ANZ dropped 3.45 per cent to $17.72, the Commonwealth sunk 2.67 per cent to $66.66, NAB fell 2.9 per cent to $17.38 and Westpac slumped 3.45 per cent to $17.05.

The miners fared a little better. BHP was down 1.6 per cent to $36.81, Rio Tinto eased 0.1 per cent to $99.18 and Fortescue fell 2.05 per cent to $18.12.

In the hardest hit sector, energy, Beach had one of the biggest dives. It dropped 6.12 per cent to $1.38.

The Aussie dollar was buying 72.19 US cents at 1200 AEST, down from 72.97 US cents at the close on Tuesday.