A combination of factors were responsible but once again Europe was the main culprit after talks to form a unity government in Greece broke down, while Italian government bond yields spiked to more than 7%, Chinese exports slowed by a lower-than-forecast pace and Japanese machinery orders fell.

Closer to home, the one bright spot was employment figures for Australia, with the unemployment rate for October falling to 5.2% after the September figure was upwardly revised to 5.3%.

According to the Australian Bureau of Agricultural and Resource Economics and Sciences, total employment in the country rose by 10,100 to 11.162 million for the month.

The S&P/ASX 200 index finished the day down 102 points or 2.35% to 4244.10, while the All Ordinaries followed suit, shedding 98.90 points to 4307.30.

Wall Street set the scene overnight, with the Dow Jones Industrial Average falling by a whopping 3.2% or 389.24 points to 11,780.94 and the S&P 500 index closing 3.67% lower on 1229.10 points.

Italy confirmed it would seek to sell $US6.8 billion ($A6.69 billion) of treasury bills after yields on 10-year notes surged beyond the 7% level at which Greece, Ireland and Portugal sought international bail-outs, as investors continued to lose faith in the country’s ability to repay its debt.

“The market is going to be focused on Italy,”Bloomberg quoted Missouri-based Wells Fargo Advisors senior equity strategist Scott Wren.

“A lot of people have made that 7 per cent level to be the line in the sand and we’re well ahead of that now. Italy has a ton of debt to refinance next year so my best guess is that we’re going to see some sort of band-aid solution.”

As for the major miners, it was a sea of red on the bourse with BHP Billiton closing down 87c to $37.46 while Rio Tinto shed $1.94 to $68.81, Fortescue Metals Group dropped 39c to $4.71, OZ Minerals shed 38c to $10.99 and Paladin Energy closed 4c lower on $1.44.

Gold stocks didn’t fare much better, with Australia’s largest locally owned miner Newcrest Mining shedding 51c to $36.36 while Kingsgate Consolidated dropped 16c to $6.86.

Predictably, there were no real stand-out performers today, although Silver Lake Resources did go against the tide after announcing a new copper discovery in the Murchison which pushed its shares 7% or 24c higher to $3.58.

Shares in uranium hopeful Extract Resources were also placed in a trading halt pending an announcement by its major shareholder Kalahari Minerals which has reportedly has been in talks with China’s Guangdong Nuclear Power Holding Co’s uranium arm about a potential downstream offer.

Brockman Resources was also forced to confirm it was in preliminary discussions with its controlling shareholder Wah Nam International Holdings over a transaction, after the Australian Securities Exchange queried the miner’s 22% share spike yesterday.

At 4.16pm (AEDT) the spot price of gold was down $US7.85 or 0.44% to $1761.85 an ounce, while the Australian dollar dropped slightly but still remained above parity with the greenback and was fetching $US1.01.

– with Bloomberg