Australian shares turned sharply lower on Wednesday after an early attempt to stabilize fizzled out with investors on edge a day after the market suffered its biggest fall in over four months.

Australia's S&P/ASX 200 index fell as much as 2.6 per cent at the mid-session to 4,706.7 - a low unseen since July 2013. It was down 1.46 per cent, or 70.48 points, at 4,761.60 by 0256 GMT, extending Tuesday's 2.88 per cent drop.

Sentiment across the Tasman Sea also soured in late trade with New Zealand's benchmark S&P/NZX 50 index erasing early gains to be down 0.94 per cent, or 57.05 points, at 6,014.27. On Tuesday, the benchmark fell 1.3 per cent.

A late recovery in US stocks had held out the hope of some stability in Asia, but an absence of investor confidence saw regional markets delve deeper into the red.

Weighing heavily on the index were the major miners. BHP Billiton fell 2.5 per cent, while Rio Tinto shed 1.0 per cent. Newcrest Mining lost 3.9 per cent.

Australia's big lenders were also sharply lower except for Commonwealth Bank of Australia, which rose 2.2 per cent after posting a result that some analysts said was surprisingly good.

Australia and New Zealand Banking Group shed 2.2 per cent, while Westpac Banking Group and National Australia Bank were down over 1.0 per cent.

In New Zealand, The Warehouse Group rose 0.8 per cent after data showed electronic retail spending had increased in January.

Leading the losers, dairy products provider a2 Milk Company fell 4.4 per cent and communications service provider Spark New Zealand lost 4.3 per cent, according to Reuters.

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Source: The Financial Express