The sharemarket finished lower as investors began to doubt the health of world economies and commodity prices continued to wane.
The benchmark S&P/ASX 200 Index fell 36.2 points, or 0.7 per cent, to 5130, while the broader All Ordinaries shed 39.8 points, or 0.8 per cent, to 5104.1.
Another round of weak data from China weighed heavily on the materials sector, which dropped 1.6 per cent. The sector is down 15.5 per cent in 2013.
China's final HSBC purchasing managers' index (PMI), a reading of factory-sector growth, eased to 50.4 in April, from 51.6 in March. On Wednesday, the country's official PMI also fell.
The new exports index fell below 50, to 48.4, for the first time this year, its lowest level since October last year. A reading above 50 indicates expansion, while below points to contraction in growth.
Rio Tinto slid 2 per cent to $53.91, while rival BHP lost 1.2 per cent to $31.79. Fortescue Metals slipped 4.3 per cent to $3.33.
"The materials sector has been under a lot of pressure over the last few days on the back of falling commodity prices," said BBY institutional dealer Anson Rosewall. "Base metals were under a lot of pressure in London last night, with nickel and tin entering bear markets and copper falling the most in a year.
While the financial sector eased, attention was still focused on high-yield stocks, with the big four banks and Telstra high on investors' lists.
Westpac fell 0.5 per cent to $33.90 before reporting its first-half earnings results on Friday.
CBA and ANZ both dipped 0.6 per cent to $72.50 and $31.50 respectively, while NAB inched down 0.3 per cent to $33.84.
Department store Myer felt the wrath of social media after chief executive Bernie Brooks said the government's increase to the Medicare levy, to help fund the disability insurance scheme, would hurt Myer profits because the money could have been spent by the public in Myer shops. Calls to boycott Myer stores were enough to scare off investors.
National turnover was 1.52 billion securities worth $3.61 billion. The dollar fell sharply from US103.60¢ to US102.27¢ in late trading.