Aussie shares pare losses but fall for third session

Inflation and interest rate worries have traders on edge as Australian shares take a hit. (Lukas Coch/AAP PHOTOS)

Australia's share market has clawed its way back from its worst day in almost six months, but inflation and interest rate worries still have traders on edge.

The S&P/ASX200 pared an almost 169-point nosedive to end Thursday 92 points lower, down 1.03 per cent to 8,819.4, as the broader All Ordinaries lost 94.6 points, or 1.04 per cent, to 9,008.3.