[SYDNEY] Australian shares dropped 1.7 per cent on Friday on concerns about growth in the global economy, while miners were further weakened as China said it will levy import tariffs on coal.
The S&P/ASX 200 index fell 89.3 points to 5,207.4 by 0148 GMT, its biggest one-day percentage drop since Feb, to hover at eight-month lows.
"News that China plans to increase tariffs on imported coal will affect the competitiveness of Australian producers in an already weak market," said Ric Spooner, chief market analyst at CMC Markets in a note to clients.
Mr Spooner said a clear break below the resistance level of 5,208 over the next few sessions would "signal resumption of the September downtrend".
The benchmark is set to lose 2.1 percent for the week.
It tumbled 5.9 per cent in September and has continued its downward trajectory, falling 1.6 per cent so far in October.
China, Australia's largest export market and the world's top coal importer, will levy import tariffs of between 3 per cent and 6 per cent on coal, which would hit Australian producers the hardest.
Basic material stocks lost the most, with the sector dropping 2.6 per cent.
Fortescue Metals Group declined 3.9 per cent to A$3.21, its lowest since July 2013, and Oz Minerals lost 3.1 per cent. Global iron ore miners BHP Billiton and Rio Tinto dropped 2.2 per cent and 2.7 per cent each.
Iron ore for immediate delivery to China .IO62-CNI=SI slipped 0.3 per cent to US$79.80 a tonne overnight, and has slumped more than 40 per cent this year.
Energy stocks were also sold off as Brent broke below US$90 a barrel for the first time since 2012 as Europe's worsening outlook and surging oil inventories hammered energy markets.
Santos Ltd skidded 2.7 per cent to July 2013 lows of A$12.70, while Beach Energy Ltd tumbled 6.5 per cent to 10-month lows of A$1.30.
The local equity market continues to be pressured by a slump in iron ore prices, a rise in bond yields and global growth concerns after the International Monetary Fund slashed its global economic growth forecast earlier in the week.
New Zealand's benchmark NZX50 index slipped 46.89 points, or 0.9 per cent to 5,219.14, led by losses in accounting software developer Xero as media reports cited Goldman Sachs had issued a sell recommendation on the country's technology darling.
Shares slumped 8.3 per cent to a one-year low NZ$19.20($15.09).
Xero has been struggling in past months on growing concerns about the company's ambitious expansion strategy, and the latest sell-off unwinds a surge seen earlier this year which saw prices more than double to NZ$46.00.
Michael Hill inched up 0.8 per cent to NZ$1.28 after the jewellery retailer said that overall third-quarter sales rose on the year despite losses at its struggling Australian shops, which account for roughly 60 per cent of total sales.