The share market has closed weaker, but above its intraday low, as investors backtracked on the big gains made on Friday.
Friday’s 1.1 per cent rise was overheated, and investors decided to consolidate, sending the market 0.7 per cent lower on Monday, IG market strategist Stan Shamu said.
“At the end of the month, fund managers tend to do a bit of rebalancing and some positioning heading into the end of the financial year,” he said.
“That really did skew the market to the positive side (on Friday) in a big way. Today the market is coming back to where perhaps it should have been last week.”
Friday’s unexpected gains were unwound after disappointing US economic data prompted a weak session on Wall Street.
Mr Shamu said fairly benign manufacturing data from China may have helped lift the local bourse from its lowest point on Monday, as investors speculated China may roll out more economic stimulus measures.
Most sectors of the market dropped, although several major energy and gold stocks were stronger on the back of higher oil and gold prices.
Commonwealth Bank shed 61 cents to $84.48, National Australia Bank fell 29 cents to $34.03, ANZ dumped 47 cents at $32.72 and Westpac was 44 cents weaker at $33.12.
BHP Billiton reversed 40 cents to $29.19, Rio Tinto descended 78 cents to $57.42 and Fortescue Metals eased four cents to $2.38.
Engineering group UGL jumped 24 cents, or 10.3 per cent, to $2.56 after announcing it would axe 200 jobs within a month, and downgraded its full year guidance.
KEY FACTS
* At 1616 AEST on Monday, the benchmark S&P/ASX200 index was down 41.8 points, or 0.72 per cent, at 5,735.4 points.
* The broader All Ordinaries index was down 40.9 points, or 0.71 per cent, at 5,734.0 points.
* The June share price index futures contract was 36 points lower at 5,742 points, with 28,373 contracts traded.
* National turnover was 1.33 billion securities worth $3.63 billion.
