Bank Chief Ian Narev has foretold that sharemarket turmoil is here to stay.

Computer-automated algorithmic trading, he said, is responsible for exacerbating the sell-off that saw $59 billion wiped off the Australian markets on Monday – the biggest fall in share prices since the lack bottom of the GFC.

Investors are expected to continue taking losses and flee the market until more is known about the state of the Chinese economy.

The S&P/ASX 200 Index opened one per cent down after bargain hunters injected $37.3 billion back into the market, hoping for a turn around.

But Monday’s 4.1 per cent slide saw the ASX 200 close at 5001 (the most dramatic one-day crash since January of 2009).

Tee Australian dollar freefell to a six-year low of 72.01 US cents.

Yesterday the dollar fell again in response to another Wall Street sell-off; while the Dow Jones posted another triple digit decline.

Ian Narev was speculative and cautious at the same time. China’s slowdown, it’s withholding of important data, and the US interest rate hike have combined to produce a unique set of fiscal circumstances – and nobody, it seems, has any idea how this will play out.

“We’ve really got to keep our eyes clearly on the long term,” Mr Narev said to the ABC.

Politicians, led by treasurer Hockey, took to the media to calm nervous investors, “There is no crisis,” said Mr Hockey, “this is a correction.”

Mr Hockey’s message is aimed at self-managed super investors who are likely to have seen a large part of their portfolio wiped away. The have been warned not to panic.

The housing market is already over-heated and not attractive to investors wishing to flee shares. Bank deposits offer below inflation returns. And the sharemarket is spiraling out of control.

Investors are faced with some daunting choices.

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