Australian shares were sharply lower at noon, erasing all of November's early gains, after commodity prices resume their tumble and overseas markets dive.

The benchmark S&P/ASX200 index sank 180.10 points, or 4.3%, to 3969.60 points, falling below the mark of 4000 for the first time this month. The S&P/ASX200 closed at 4018 at the end of October, the worst month on record for Australian shares since the crash of 1987.

Ausbil Dexia chief executive Paul Xiradis said the falls on local markets were across the board.

"We're seeing financials, resources and listed property trusts weaker,'' he said. "I think the only part of the market where I see a bit of green is in the telecommunications sector, which is really Telstra.

"I think it's just a safe haven when the market has a question mark about other sectors at this point.''

Mr Xiradis said the local market followed falls in the US and Europe.

Shares in BHP Billiton led the dive, falling $2.05, or 7%, to $27.15, while Rio Tinto fell $8.66, or 11%, to $70.38 after another steep slide on commodity prices overnight with the key Reuters/Jefferies CRB index slumping 4.1%.

Shares in Fortescue fell 21 cents, or 7.8%, to $2.50.

The Australian dollar also retreated, trading recently at 66.22 US cents, down from yesterday's local close of 67.31 US cents. It was also buying 64.30 yen.

Banking shares also fell sharply. Commonwealth Bank shares fell 76 cents, or 1.9%, to $39.04, National Australia Bank dropped $2.17, or 8.8%, to $22.53, ANZ declined 95 cents, or 5.6%, to $16.00, while Westpac was down 78 cents, or 3.7%, to $20.22.

Macquarie Group shares lost $2.82, or 8.9%, to $28.98.

 the resourses are  from http://www.smh.com.au/