Not only have moves in the Australian dollar become more aligned to the Chinese equity roller-coaster, but the Australian sharemarket, too, has been behaving more like, say, the Santiago Bolsa​.

This trend has been noted by a range of analysts, most recently UBS investment strategist David Cassidy.

He says in a note on Wednesday that the S&P/ASX's 15 per cent slide from its April 27 peak this year makes its performance look more like an "emerging rather than a developed market".

"The emerging equity market sell-off has been driven by China growth concerns and associated emerging market vulnerabilities to which most developed markets had been largely immune until their dramatic August swoon," Cassidy says.

This guilt by association even extends to jitters ahead of this week's crucial meeting of the US Federal Reserve to decide whether or not to begin the country's first tightening cycle in almost a decade, he says.

"Uncertainty around the Fed's monetary policy lift-off is also likely weighing on markets somewhat, particularly the widely perceived vulnerable emerging market complex," Cassidy notes.

However, on closer inspection, not all business sectors are equal when it comes to the developing market-style sell-off in recent months.

Banks, for example, have been under pressures because of the distinctly domestic regulatory crackdown on lending to property investors, and calls on investors for more capital ahead of tougher equity ratio rules.

That the decline of financial sector stocks began with the emerging market ructions is pure coincidence, Cassidy argues.

"These concerns began to impact around the same time as emerging markets started to weaken," he says.

"Indeed, closer inspection shows the banks to be underperforming on their own terms, with two distinct bouts of weakness in April and August in line with bank capital-raising activity."

However, resources appear to have been caught up in the emerging market gloom because of their intimate correlation with Chinese demand and commodity prices.

These factors had also proved a drag on the Australian currency, which had lost nearly 15 per cent since May, to a six-and-a-half-year low of US68.96¢ a week ago before a recent bounce.

TD Securities' chief Asia-Pacific macro strategist Annette Beacher noted just before the bounce that the Aussie, too, had been behaving so much like an emerging market currency that it had ignored a recent recovery in the price of iron ore, to which it had hitherto been closely tied.

The decline of the local unit has, in turn, made the Australian stock exchange a riskier place for foreign investors, says Cassidy, and this has also become part of the negative feedback loop.

"The weakness in the Australia dollar has added to the pain for overseas investors holding the Australian market," he says.

For months, foreigners have been aggressively selling down their exposure to the Australian sharemarket, and to the big banks in particular. The trend has accelerated over the past few weeks.

The flip side, of course, is the benefit of a weaker currency to exporters and import-exposed industries, and these are worth keeping an eye on, Cassidy urges.

As Australia muddles along with growth of around 2 per cent, the other main concern is whether the regulatory crackdown on speculative property investment crimps one of the economy's main drivers.

Cassidy reckons this will be reflected in further struggles for the equity market, although he does see some sound buying opportunities.

"On balance, while market growth will likely be low single digits in the 2016 financial year, we think the market can rebound in the next few months on fading risk aversion in relation to China and Fed fears, with attractive valuations versus interest rates the key support for the market," he writes.

"Bank valuations, in particular, have now improved considerably, while bad debt charges remain benign."

He also says the resources sector has the "potential to bounce" as China fears fade, but adds that  "the structural nature of the China slowdown in areas such as property construction and the likelihood of ample commodity supply cautions against taking an overtly bullish stance on miners".

Outside financial and mining stocks, Cassidy notes the market is valuing more highly those companies with steadier earnings.

However, less defensive plays such as ALS, BlueScope Steel, CIMIC Group, Sims Metal Management and Treasury Wine Estates "have all outperformed and been rerated since the April peak", he says.

Among those companies which have been derated, he prefers those with no earnings risk, where absolute price-earnings ratios are "undemanding", and where there is "upside to analysts' valuation-based target".

Here, he groups AMP, ANZ Bank, Harvey Norman, Incitec Pivot, Lendlease Group, Macquarie Group, Perpetual, Mirvac, Qantas, ResMed, Stockland and Westpac Banking.