Stocks are sliding globally, including in Australia, as the US Federal Reserve hints at steeper rates hikes as soon as the war in Ukraine eases.
Wall Street ended in the red overnight, with losses as large as 2.2 per cent on the Nasdaq. Apple, Microsoft, Amazon and Tesla contributed to the tech-heavy sector's decline.
European markets also dipped. Germany's DAX lost 1.9 per cent.
The ASX 200 was down all day on Thursday and ended with a loss of 0.6 per cent, to 7,443 points.
The bottom-performing stocks were Life260 and Liontown Resources, down 6.7 and 6.7 per cent respectively.
Magellan was the top performer, with a gain of 10.1 per cent.
Miners, including Iluka and Perseus, were also gaining as commodity prices moved overnight.
Seven of the 11 major sectors were down, including energy, financial and tech.
Meanwhile, Westpac has been fined $1.5 million for mis-selling consumer credit insurance (CCI) on its credit cards and certain sorts of loans.
CCI is often dubbed "junk insurance" and it has been an endemic problem in the financial sector for years.
It ended down 0.5 per cent, in line with the broader sell-off within the banking sector.
US may lift rates further than expected
The Fed's latest meeting notes showed many members of it refrained from voting for a bigger rate hike at the March meeting only because of Russia's invasion of Ukraine.
The US economy is battling rising inflation and more rate hikes are seen as imminent to tackle this, with many analysts expecting a 0.5 per cent rise, not the more typical 0.25 per cent.
"Many members viewed one or more 50bp rate hikes could be appropriate at future meetings if high inflation persists," CBA noted this morning.
The Australian economy is also battling price hikes, however the Reserve Bank only this week decided to keep rates at historical lows for a while longer.
"USD fluctuated modestly as market participants digested the FOMC's March meeting minutes," CBA's analysts said.
"AUD/USD dropped below its pre RBA level and is trading near 0.7510.
"Weaker oil and equity prices weighed on AUD."
Meanwhile, there are jitters about China's economy, with the entire city of Shanghai under another COVID lockdown. That's as the major financial hub battles 13,000 cases of the virus daily.
"China's COVID-zero policy leaves Shanghai still locked down with cases rising still, and nerves fraying about further spreads and more sweeping lockdowns," OANDA analyst Jeffrey Halley said in a briefing note.
"China's Caixin Non-Manufacturing PMI slumped to 42.0 in March from 50.1 in February.
