The ASX 200 fell more than 3.3 percent, losing 155 points, to 4540.4 after confidence on the stock market turned into worries that the US$700 billion rescue package passed by the US Congress last week would do little to reverse the effects of the global economy.

Leading the fall were banks and mining stocks, with BHP Billion losing 2.1% – the lowest close in 17 months, Rio Tinto losing 5% and Fortescue Metals losing 56 cents, or 11 percent, to $4.41 – losing two-thirds of their value in the past three and a half months.

In the banks, only Suncorp-Metway was the best performer, rising 40 cents to $11.08 over rumours of a break-up and sale of its assets.

European markets are also under siege, with Germany’s government planning to bail-out the second-best mortgage bank in Germany, Hypo Real Estate Holding, for a value of $89 billion.

The Australian dollar also plunged, falling against the US dollar and the Japanese yen; both setting new record lows, but managed to regain slightly from their losses.