Australian shares and the Aussie dollar both took a hit as global markets fretted over a potential second coronavirus wave, particularly in Europe, adding to the already unsettling backdrop of a US presidential election.

The S&P/ASX200 benchmark index closed 38.5 points down, or 0.7 per cent, to 5784.1 on Tuesday, but did manage to recover from a three month low of 5763.2 earlier in the day.

The All Ordinaries index fell 40 points, or 0.7 per cent, to 5973.5.

The Aussie dollar also sank to a one month low just below 72 US cents at one stage, before partially recovering to 72.09 US cents at 1615 AEST.

That was down from 73.14 US cents at the close on Monday.