Australian shares posted their biggest fall in nearly six months, with more than $34 billion wiped off the market’s value, as ongoing fears about the sliding oil price spooked investors.

Wednesday’s fall takes total losses on the Australian share market so far this year to around $130 billion.

The ASX 200’s 2.33 per cent fall to 4877 was the benchmark index’s worst day since September last year.

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The broader All Ordinaries also dropped 113 points to plunge back below 5000, and close at 4931 at 5:00pm (AEDT).

The National Australia Bank was a huge drag on the market, losing more than 5.5 per cent on details around the spin-off of its troubled UK operations.

The quarter of what is now called CYBG that is being floated has been priced at 180 British pence, at the low end of market expectations. NAB closed at $26.36, a three-year low.

BHP Billiton did not set a new low, but it came close.

The resources and energy giant fell more than 4 per cent to $14.27 after yesterday’s credit rating downgrade.

BHP was also hit by a renewed slump in oil prices. West Texas crude dropped back below $US30 a barrel, with Brent down around 5 per cent to $US32.60.

That saw most oil and gas companies hammered. Woodside, Santos and Origin all lost 5 per cent or more.

The slump in commodity prices continues to affect Australia’s economy, with the trade balance posting its fourth worst result in history.

The deficit of $3.5 billion was a lazy $1.2 billion worse than economists had expected, and driven by a 16 per cent fall in iron ore and mineral exports and an 8 per cent fall in coal sales.

The hit to national income and the prospect of a weakening housing market saw the banks and retailers fall.

Westpac, ANZ and the Commonwealth all fell close to 3 per cent and Woolworths dropped 2.3 per cent.

Spot gold held firm at $US1,128 an ounce, but the Australian dollar fell to 70.2 US cents.

-ABC