The sharemarket fell for the sixth day in a row as offshore investors trimmed their portfolios before expectations a depreciating local currency will eat into their profits.
The benchmark S&P/ASX 200 Index dropped 41.8 points, or 0.8 per cent, to 5062.5, while the broader All Ordinaries Index fell 40.3 points, or 0.8 per cent, to 5069.2.
The losses made for the market's longest losing streak since July 2012. The All Ords is down 4.6 per cent since the beginning of the month, losing about $70 billion in value.
Blue-chip stocks, such as Commonwealth Bank, BHP and Telstra, which have benefited from an influx of offshore capital over the past few years, led the losses.
"Offshore investors in the Australian market are now taking their profits and running because they don't want their gains compromised by a falling Aussie dollar," Patersons Securities economist and analyst Tony Farnham said.
"There is an increasing expectation the Fed will start tapering at its December meeting next week, whereas only a few weeks ago the consensus was this would not occur until March. When stimulus is reduced it should translate to a stronger US dollar, putting pressure on the Aussie dollar cross-rate." At the local close, the dollar was buying US90.25¢, down from US91.33¢ at the previous close.
Information technology was the worst-performing sector, down 1.6 per cent as Computershare, another stock that has been popular with offshore investors, lost 1.3 per cent to $10.72.
Three of the big four banks fell. CBA lost 1.3 per cent to $73.51, Westpac fell 0.2 per cent to $30.82 and ANZ shed 0.8 per cent to $30.35. National Australia Bank bucked the trend, up 0.5 per cent to $33.04.
The biggest resource stocks were sold off despite relatively strong commodity prices. BHP fell 1.8 per cent to $35.54, as analysts considered a presentation by divisional head Tim Cutt which outlined a revamped petroleum strategy designed to increase cash flow and value.
Rio Tinto, which is seeking investors for its delayed $19 billion Simandou iron ore project in Guinea, lost 1 per cent to $65.14. Transfield Services was the worst-performing stock, down 13.8 per cent to 84.5¢. Copper miner OZ Minerals was the best performer, rallying 12.1 per cent to $2.97, after shedding 14.2 per cent the previous day.