The Australian share market has gone into a steep dive again, with $26 billion wiped off its value as investors switch their focus from China to the United States.

The local market had traded eight sessions in a row lower since New Year’s Eve, picked up on Wednesday, but headed south again on Thursday. That’s nine negative sessions out of 10 from and including December 31.

The session got off to a shaky start, with the market slumping by more than two per cent in early trade.

Stocks across the board, except for the safe-haven gold sector, were dumped, including the big banks and Telstra.

Market heavyweight BHP Billiton fell sharply at first, but some broker upgrades helped it finish higher at $14.88.

BHP’s gains helped the All Ordinaries claw back some of its losses to close 1.54 per cent lower at 4,964.1 points.

Since New Year’s Eve, the index has lost around $125 billion in value.

The latest plunge was sparked by widespread falls on Wall Street overnight, where the S&P500 index sank 2.5 per cent to close below 1900 points for the first time since September.

US investors were worried about falling energy prices, potentially disappointing corporate earnings and the global economy.

IG market strategist Evan Lucas said the big drop on Wall Street has investors questioning the strength of US equities rather than the strength of China’s economy.

“Today’s story is genuinely different to what’s previously been going on,” Mr Lucas said.

“What happened last night in the US markets is probably more the risk that we’re seeing today rather than around China.”

Investors were now asking whether the strong run upwards since 2008 by the global-leading US market could be sustained.

Investors were shifting their money away from shares and into bonds.

They were dumping anything linked to oil because the price of oil has been sinking rapidly.

Any stocks seen as risky were being sold off.

Investors were also worried about whether US company earnings were going to be squeezed by the strong US dollar and more possible interest rate rises.

US stocks were viewed as over-valued.

Furthermore, investors were wondering if consumer spending and home loans are going to slow in the US.

“We are now asking the question: Is the bull market in the US coming to an end,” Mr Lucas said.

“Last night may be a sign of that being a possibility.”

Mr Lucas said the plunging oil price and the sharp decline in the value of energy stocks had made investors adverse to anything considered risky.

And the Australian share market, which has a strong exposure to emerging economies and US-dollar-denominated debt, is considered risky.

So, international investors were likely to sell out of Australian shares and go to something or somewhere considered safer.