Australian shares fell more than 5% on Tuesday and were headed for their worst session in over two years, as worries over rising inflation and fresh COVID-19 cases in China sparked a rout in global equities.

The S&P/ASX 200 index fell as much as 5.3%, posting its biggest intraday percentage drop since March 2020 and extending losses to a third session.

Stocks and government bonds plunged across the globe as red-hot US inflation data fuelled worries about more aggressive policy tightening by the US Federal Reserve when it meets later this week.

Tech stocks led losses on the Australian benchmark index, shedding as much as 8.2% to hit a more than two-year low after Wall Street’s weak finish overnight.

Australia-listed shares of Block Inc fell 18.2% to lead losses on the tech index, followed by Appen and Novonix, which were down 11.6% and 13.5% respectively.

Miners plummeted 6.7% in their worst intraday session in more than two years, after iron ore prices fell on Monday as fresh COVID-19 outbreaks in China revived fears of lockdowns dampening demand in the world’s top steel producer.

Mining trio Rio Tinto, BHP Group and Fortescue Metals Group fell between 7.9% and 6.2%.

New Zealand shares fall after hot US CPI print; Australian markets closed

Financials retreated 5.4%, with the big four banks losing between 6.5% and 5.3%. Gold stocks dropped 5.2% as the US dollar rallied on expectations of further Fed rate hikes.

New Zealand’s benchmark S&P/NZX 50 index extended losses to a fourth session, declining as much as 2.8% to hit its lowest level since May 2020.