The sharemarket fell to its lowest level in six weeks despite the release of better-than-expected economic data domestically and in China.
Traders were cautious before the Reserve Bank's Tuesday interest rates decision and a flurry of initial public offerings in the next fortnight.
On Monday, the benchmark S&P/ASX 200 Index fell 40.6 points, or 0.8 per cent, to 5279.5 as every large sector finished in the red. The broader All Ordinaries Index shed 40.8 points, or 0.8 per cent to 5273.5.
The market got a weak lead from the US, where equity markets closed lower on Friday amid thin trading due to the Thanksgiving holiday.
Equities were not helped by a rise in the dollar. At the local close, it was buying US91.48¢, up from US90.91¢ at Friday's close. The dollar was boosted by better Chinese manufacturing data but the numbers failed to inspire the sharemarket.
IT was the worst-performing sector, down 1.4 per cent as Computershare lost 1.2 per cent to $10.79.
The big four banks fell, the Commonwealth Bank 1.3 per cent, to $76.85. Westpac lost 0.9 per cent, falling to $32.60. National Australia Bank shed 0.8 per cent to $34.31 and ANZ dipped 0.2 per cent to $31.85.
The biggest mining stocks were lower. BHP Billiton lost 1.3 per cent to $36.90. Rio Tinto shed 0.3 per cent to $65.85, as the spot price of iron ore was steady at $US136.40 a tonne.
Mining services contractor Forge Group was the worst-performing stock in the benchmark index, dropping 17.3 per cent to 62¢. The stock lost more than 80 per cent of its market value last week after emerging from a three-week trading halt to reveal a $127 million write-down.
Metcash was the best-performing stock, up 7.5 per cent to $3.28, after half-year earnings before interest, tax and amortisation from its IGA grocery chain down 13.9 per cent due to a 1.5 per cent fall in sales amid aggressive discounting by competitors. The two biggest sellers of food and liquor were both lower as Woolworths fell 0.4 per cent to $33.56, while Wesfarmers, owner of Coles, dipped 0.1 per cent to $42.87.
GrainCorp shed 3.6 per cent to $8.41, as chief executive Alison Watkins announced her resignation following the government's decision to block a $3.4 billion takeover bid. Ms Watkins will take the top job at Coca-Cola Amatil, which was up 0.2 per cent at $12.11.
Energy was the best-performing sector, closing flat, as Oil Search jumped 3.4 per cent to $8.27 and uranium miner Paladin Energy added 7.3 per cent to 44¢.