Australian shares closed 3% lower on Thursday, recording their worst day in nearly one-and-a-half years, as geopolitical tensions heightened after Russian forces fired missiles at several Ukrainian cities and landed troops on Ukraine's south coast, according to officials and media reports.

The S&P/ASX 200 index ended at 6,990.6, with its drop marking its worst session since Sept. 4, 2020.

The benchmark is also on track for its first weekly loss this month.

Global markets plunged after Russian President Vladimir Putin said he had authorised a special military operation in eastern Ukraine.

Australian shares drop as Ukraine-Russia crisis deepens

Back home, miners led the losses on the benchmark, falling as much as 5.2% in their worst intraday slump in five months. Sector heavyweight BHP Group declined 6.9% and Rio Tinto lost 3.8%.

The "Big Four" banks slid 2.1%-3.4% to lead financial stocks down 2.8%.

Energy stocks slipped 1.8%, with Woodside Petroleum and Santos retreating 2.7% and 0.4%, respectively.

Technology stocks fell 6.4% to be the biggest percentage losers among sub-indexes.

"When the market drops to such steep levels, many margin calls push investors to either put some cash in or to sell down some stock to get their buffer," said Brad Smoling, managing director of Smoling Stockbroking.

Such forced margin call selling, Smoling said, tend to go on for a while before the market stabilizes. "Unless we start seeing Dow futures going really positive, we could be in for a lot more sell-offs," he added.

Gold stocks were the sole gainers, rising 4.3% after gold prices jumped to their highest in more than a year.

New Zealand's benchmark S&P/NZX 50 index slid 3.3% to finish at 11,732.55, it lowest since September 2020.