Aussie stocks plunge more than 5 per cent in wild afternoon swing

The Aussie share market has erased much of its gains, swinging lower in late trade to finish down more than 5 per cent.

As of 4.20pm AEDT the benchmark S&P/ASX 200 was down 270 points of 5.3 per cent to 4,842 points.

It's been a wild day for the local market, which immediately swung up 2 per cent soon after trade opened this morning.

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The Aussie dollar is now buying over 61 US cents for the first time in eight days as it lifts from the 59.14 US cents it was trading at when markets closed yesterday.

Major banks such as Commonwealth Bank and Westpac all suffer losses in excess of 5 per cent, as did Wesfarmers, which fell 7.3 per cent.

The fall ends a streak of three days in which the ASX 200 had posted gains.

Dale Gillham, Chief Analyst of successful financial services company Wealth Within, said this morning it is normal to see the market bounce in volatile times.

"On Monday the stock market fell to 4429.12 points making the current crash 22 days long and the fall 39 per cent from the high on 20 February," said Mr Gillham.

"From the open on Monday of this week, the market is currently trading around 6 per cent higher after three days of sustained rises, and investors are now asking if we have seen the bottom.

"Remember, it is normal for the market to bounce and retest prior highs and last week I mentioned that we should see this occur any day now and for this to last over one or more weeks."