The ASX 200 recouped much of its earlier losses to close 0.7 per cent lower, down to a level not seen in 10 months.
The miners, and in particular gold miners, were sold off, along with the major banks as fears mounted about a slowing global economy.
Brent crude oil rose again, trading at above $US113 a barrel, with the US and Iran exchanging threats related to the Strait of Hormuz.
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