It's a selloff that's played out even more severely in other markets around the world - the NASDAQ is down 27 per cent so far this year - and some market watchers say there could be much more pain ahead.
"Essentially, the issue for markets is that all of the safeguards, all of the potential white knights for markets, have disappeared," said Michael McCarthy, chief strategy officer for Tiger Brokers Australia.
"High inflation means that central banks are no longer in a position to support markets. The COVID expenditure and the expansion of government balance sheets means that governments are in no position to support markets."
Mr McCarthy said as central banks pull back on stimulus measures, there could be a major readjustment.
"As a share market, we've been through the greatest boom ever recorded in modern times," Mr McCarthy said.
"Unfortunately, what that could mean is that we're about to see the greatest bear market."
Financial veteran Mathan Somasundaram, founder of Sydney-based Deep Data Analytics, is also predicting deep pain ahead. He points to recent food riots in Sri Lanka and a currency collapse in Egypt as a sign of trouble ahead, especially for developing countries.
"I think it's going to happen more and more," he said.
Mr Somasundaram blames central banks for creating the scenario. It was always clear, he said, that capital expenditure wasn't rising and so demand for goods would outstrip supply.
"That problem started in mid-2020, and when you throw in an extreme amount of stimulus, that accentuates the problem," he said.
"So we knew by the end of 2020 that inflation was going to take off."
But central banks didn't try to tackle inflation through interest rate hikes until the end of last year, 12 months too late, he said.
Central banks around the world have been taking aggressive measures to curb inflation.
Higher cash rates - and bond yields - tend to depress share prices over time, as the cost of capital increases and investors switch out of more volatile stocks into the relative safety of government securities.
In Australia, low interest rates meant the governments got to jam out cheap debt and everyone was being urged to buy a house, he said.
Australia typically flips between a property bubble on the eastern states and a commodity bubble in the western states, Mr Somasundaram said.
"We've just had both of them together at the same time," he said. "Guess what we're going to have on the other side."
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