The sharemarket finished lower as weaker commodity prices and the prospect of higher unemployment weighed on investors.
The benchmark S&P/ASX 200 Index dropped 32.2 points, or 0.67 per cent, to 4809.5. The All Ordinaries dropped 28.8 points, or 0.6 per cent, to 4797.6.
The big miners and banks dragged the market lower.
"Weaker commodity prices set the theme," said RBS Morgans client adviser Bill Chatterton. "BHP, Rio and Newcrest are all suffering, and the banks have got knocked around a bit."
The energy sector was more resilient due to better oil prices, while overall trading volumes were relatively light.
BHP Billiton dropped 65¢ to $30.95, Rio Tinto shed $1.06 to $51.64 and goldminer Newcrest lost 83¢, or 7.7 per cent, to $9.90.
Fortescue Metals Group lost 6¢ to $3.30. Atlas Iron was down 4.75¢ to 79.5¢ after saying it would start construction on a new Pilbara mine. Oil and gas players finished stronger, with Woodside up 30¢ at $36.19, and Santos adding 19¢ to $13.41.
The wider market took a hit after the release of ANZ job advertisement figures, which showed a 1.8 per cent fall in the number of ads posted in June. Official labour force data will be released on Thursday.
Among the big four banks, Commonwealth shares were flat at $68.99, Westpac shed 1¢ to $28.34, ANZ lost 27¢ to $28.13 and National Australia Bank closed 30¢ lower at $28.87.
The Sydney gold price was $US1221.70 an ounce, down from $US1243.10 on Friday.
The dollar was lower as the greenback continued to surge after strong US jobs data. At 5pm on Monday it was trading at US90.58¢, down from US91.42¢ on Friday.
UBS interest rate strategist Andrew Lilley said bond futures recovered some of the losses that followed the release of the US non-farm payrolls data on Friday night.
He said investors would wait for Thursday morning (Australian time) to hear what US Federal Reserve chairman Ben Bernanke had to say in a scheduled speech.
At 4.30pm on Monday, the September 10-year bond futures contract was trading at 96.08 (implying a yield of 3.92 per cent), down from 96.165 (3.835 per cent) on Friday.