The Australian market has slumped Wednesday on the back of weakness in global commodity prices.

At the close of trade, the benchmark S&P/ASX 200 index was down 91.60 points or 1.59 percent at 5,665.70, while the broader All Ordinaries index sank 89.10 points or 1.54 points at 5,703.20.

"It was a very tough day with a weak day from U.S. markets," CMC Markets chief market analyst Ric Spooner told Xinhua Wednesday.

"The drop in oil and other commodity prices concerned investors and we saw selling in the mining and energy sector which created a general nervousness in the Australian market."

As a result there were also heavy falls in financial stocks.

With important weekly U.S. oil inventory data due to be released tonight, Spooner said the read could prove very volatility for investors down under Thursday.

"If the figures are bad and inventories are up, it could make the markets nervous and lead to more selling," Spooner said.

"However with the oil market already down a long way, if the figures are better than expected it wouldn't surprise me to see a rally in the oil price which could drive energy stocks tomorrow."

In banking stocks, The Commonwealth Bank was down 1.75 percent, Westpac Bank lost 1.78 percent, ANZ dropped 1.79 percent and National Australia Bank plunged 2.94 percent.

Mining shares also suffered, BHP dived 3.75 percent, Rio Tinto slumped 2.88 percent, Fortescue Metals plummeted 4.64 percent and Newcrest Mining slid 1.19 percent.

Oil and gas producers were hit hard, Woodside Petroleum tumbled 2.11 percent, Santos sank 2.01 percent and Oil Search fell 2.86 percent.

In retail, Wesfarmers dipped 0.72 percent and Woolworths edged lower at 0.20 percent.

Telco Telstra slipped 1.14 percent, Qantas was flat at 0.00 percent and biomedical firm CSL added 0.68 percent.