Sydney - The steep fall on Wall Street proved a strong gravitational pull on Australian stocks Thursday with the market losing most of recent gains.

The ASX 200 gave up 85 points, or 2.3 per cent, to 3,694.

"We had a good run on commodities over the last few days and we are reversing some of those gains," IG Markets dealer Oliver Stevens said.

Giant miner BHP Billiton Ltd lost 5 per cent and resources rival Rio Tinto Ltd lost 4 per cent of their value. Macquarie Bank Ltd, the country's biggest investment bank, fell 5 per cent after it warned of a prospective fall in earnings. (dpa)