Local shares were being hammered following a global rout overnight.
The major banks and the big miners led the fall, following markets in Europe and the US.
Renewed fears over the impact of Brexit, the UK’s withdrawal from the European Union, was sparked by the news that property trusts Aviva, Standard Life and The Pru had suspended redemptions.
The ASX 200 dropped by as much as 1.5% before recovering some lost ground in late trade to close at 5,197.50, down 30.50 points or 0.58%.
BHP was the major drag on the market, closing down 3.8% to $18.71.
Among the banks, the ANZ was down 1.8% to $22.96 and Westpac 1.1% to $28.20.