Concerns about a US government shutdown have hammered the Australian sharemarket to its worst one-day fall in almost two months.
The Republicans and Democrats are struggling to strike a deal to keep government money flowing. President Barack Obama warned if an agreement could not be made it would force a partial government shutdown of services deemed non-essential.
The warring words sparked broad-based selloffs across global sharemarkets. Australia's benchmark S&P/ASX 200 Index fell 88.2 points, or 1.7 per cent, to 5218.9.
Finance stocks were among the worst hit during Monday's selloff. Commonwealth Bank plummeted 2.3 per cent to $71.50, while ANZ weakened 1.9 per cent to $30.93.
But Macquarie Private Wealth divisional director Martin Lakos said the losses were on slim volumes. "It's a big one-day fall. There has been a little bit of risk-off taking place," Mr Lakos said.
"But we've had about $2 billion turnover. That's half the daily average for the quarter. It certainly suggests that that's not a strong commitment to the downside."
Despite the slide into negative territory, the ASX finished the September quarter up 8.7 per cent, its best result since 2009.
St George Bank economist Janu Chan said a reversal of expectations of the growth of China, Australia's biggest trading partner, had fuelled optimism.
Fortescue Metals was among the biggest winners for the quarter, advancing 56.3 per cent, while fellow miner Arrium leapt 56.4 per cent.
Gold stocks also enjoyed a strong rally, particularly after the US Federal Reserve delayed tapering its $US85 billion-a-month asset buying program. Beadell Resources was up 84 per cent, while Evolution Mining firmed 48.25 per cent.
ANZ head of commodity strategy Mark Pervan said during the middle of the year it was widely expected that Chinese growth for the full year would disappoint. Mr Pervan expected China's economy to continue to moderately improve in the fourth quarter, which would flow through to the ASX.
Some defensive stocks were also caught in Monday's selloff. Blood products maker CSL dived 2.6 per cent to $64, while Telstra eased 1 per cent to $4.97. Wesfarmers, the owner of Coles and Bunnings, slid 1.4 per cent to $41.13.