The S&P/ASX 200 index <.AXJO> fell 18.710 points to 5077.700 by 0445 GMT. The benchmark fell 2.1 percent on Tuesday, its lowest finish since Aug 24.
The index extended losses after the release of slightly weaker-than-expected GDP data, hitting a session low of 5019.30. It later trimmed losses.
Australia experienced the slowest economic growth in two years over the second quarter due in part to a sharp fall in export volumes, knocking the Australian dollar to its lowest in over six years.
The financial sector led losses with all major banks down. Macquarie <MQG.AX> lost 2 percent and AMP
fell 1.1 percent.
The energy sector was hit hard by an 8 percent dip in oil prices overnight. Origin <ORG.AX> fell 4.1 percent, while Whitehaven Coal <WHC.AX> lost 3.6 percent.
Armour Energy soared as much as 120.6 percent, its highest in 13 months, after it entered a deal to buy oil and gas interests in Queensland from Origin.
Austin Exploration also rose, up as much as 36.4 percent, after its drilling operations in Mississippi found oil.
New Zealand's benchmark NZX50 share index <.NZ50> fell 1.36 percent or 76.98 points to 5,578.01 on Wednesday.
Air New Zealand <AIR.NZ> dropped 3.03 percent as investors continued to worry over increased competition from budget rival airline Jetstar, which announced four new regional routes last week.
The volatility of equities markets hit growth stock Xero <XRO.NZ>, which traded down 2.88 percent.
Consumer-related companies stumbled with concerns about slowing growth in the economy, which could have an effect on consumer spending in the months to come. Sky TV <SKT.NZ> dropped 4.53 percent, Sky City <SKC.NZ> fell 2.8 percent and Trade Me<TME.NZ> was down 1.1 percent.
(Reuters) - Australian shares fell 0.37 percent on Wednesday on broad-based losses as the market tracked a sell-off in global equity markets.