The Australian stock exchange has dropped nearly 3% in early trading as the fallout from the news of Dubai’s near-default spreads to global markets. The index remained depressed through mid-afternoon trading.

The dip represented around $A30 billion in lost market value.

At home, the Kiwi dollar was hit hard, falling 2.25% against the greenback.

The All Ordinaries index has dropped 2.7% within the first hour of trading, with some financial stocks down 4% or more.