Australian stocks finished lower as investors sold off mining stocks due to weaker commodity prices.

IG markets analyst Evan Lucas said the major miners suffered as the price of iron ore continued to fall.

“The falls at Rio and BHP have got faster as iron ore continues to slide and there’s a bit of a rotation out,” Mr Lucas said.

“It’s been unfortunately a bit of a disappointing afternoon and we’re back to a level that we saw at the start of the morning.”

It came despite the banks receiving a bounce in the wake of last week’s falls.

The local market started trading on a negative note as investors took their cues from a poor finish on Wall Street and lower commodities prices during weekend offshore trading.

Better-than-expected manufacturing data from China published over the weekend also gave the local market a boost earlier.

But the data and stronger local retail data was not enough to stem the losses.

Materials stocks were down significantly, with BHP falling 79 cents to $34.09 and Rio off $1.38 cents at $53.80.

Fortescue Metals Group lost nine cents to $3.26.

Australia’s big four banks were in positive territory.

ANZ was up 31 cents at $27.85, CBA had climbed six cents to $66.92, NAB had advanced 30 cents to $29.30 and Westpac was 56 cents higher at $29.00.

Making news on Monday, shares in Cochlear tumbled after the hearing implant maker reported slowing growth so far in 2013.

Cochlear was down $11.66, or 18 per cent, at $52.88.

Also well down was waste management company Transpacific, which announced the resignation of its chief executive and downgraded profit estimates for 2012/13.

Transpacific was down 10.5 cents, or 11.8 per cent, at 78.5 cents.

KEY FACTS

* At the close of trade the benchmark S&P/ASX200 index was 38.3 points, or 0.78 per cent, lower at 4,888.3 points.

* The broader All Ordinaries index was 40.3 points, or 0.82 per cent, weaker at 4,873.7.

* The June share price index futures contract was 42 points down at 4,891 points with 29,019 contracts traded.

* National turnover was 1.3 billion securities worth $4.0 billion.