The ASX 200 index closed 2.1 per cent lower at 7,318 points on Tuesday, with every sector posting losses.

Falling commodity prices pushed Australia stocks down as concerns over China’s severe COVID-19 restrictions and its impact on global economic growth weakened investor sentiment.

The broader All Ords index fell by a similar margin to 7,604 points. In dollar terms, around $55 billion was wiped off the value of the local share market.

Energy and materials stocks suffered heavy losses, like Fortescue Metal (-6.9pc), BlueScope Steel (-8.7pc), BHP (-6pc), Woodside Petroleum (-4.6pc), Santos (-4.3pc) and Rio Tinto (-4.3pc).

Meanwhile, shares in payment solution provider EML Payments plummeted by 38.6 per cent, making it the worst performer on the benchmark index.

That was after it issued a profit downgrade, slashing its pre-tax earnings guidance by about 8 per cent for the current financial year.

Some of other weakest performers include Sims (-9.6pc), Mineral Resources (-9.4pc), Champion Iron (-8.7pc), Liontown Resources (-7.6pc), Tyro Payments (-7.6pc) and Chalice Mining (-7.2pc)

The Aussie dollar slightly recovered to 72.1 US cents as of 4:20 p.m. AEST, but was still near a two-month low.

“Markets fear additional lockdowns in China will restrict activity and impact economic growth, not just in China but also throughout the rest of the world,” ANZ economists Brian Martin and Daniel Hynes wrote in a note.

It has been a volatile week for the local currency, which traded at 74.58 cents last Thursday before falling to 71.36 cents yesterday. Essentially, it experienced a 4.3% peak-to-trough loss.

The Australian dollar is particularly sensitive to China’s lockdowns and slowing economic growth.

That is particularly given that China is the biggest buyer of Australia’s iron ore, which tumbled 9.8 per cent, to $US135.75 a tonne.