Australian shares sank into correction territory on Thursday after the US Federal Reserve signalled its intent to raise interest rates in March, triggering losses across global markets hooked on years of ultra-easy monetary stimulus.

Oil hit a seven-year high as the US rejected Russia’s demand to exclude Ukraine from NATO, fuelling a potential energy crisis. The S&P/ASX 200 Index lost 123 points or 1.8 per cent to 6838.3, marking a more than 10 per cent drop since its peak. Freight software provider Wisetech Global fell 9.9 per cent to $43.31, and buy now, pay later challenger Zip 9.7 per cent to $2.90.