The share market has dropped sharply after the chairman of the US Federal Reserve would proceed carefully on interest rate cuts, and probably move at a considerably slower pace than the market expects.
The benchmark S&P/ASX200 index on Monday finished down 73.5 points, or 0.95 per cent, to 7,625.9, while the broader All Ordinaries fell 76 points or 0.96 per cent, to 7,855.6
In the US, Fed chairman Jerome Powell said in a rare television interview that the Fed would tread carefully on interest rate cuts, especially given the strength of the US labour market.
Over the weekend, the US Labor Department reported that the US economy added 353,000 jobs in January, well above the highest forecasts.
Mr Powell said the first time for an interest rate cut would likely not be until the middle of the year, which suggests that the central bank will leave rates on hold both at its March 20 and May 1 meetings and not trim them until June.
Domestically, a private survey of job advertisements suggested the Australian labour market also remains resilient, with the monthly ANZ-Indeed survey showing a 1.7 per cent rise in help wanted ads in January.
"There is no doubt the labour market is cooling, but we do not expect to see a significant downturn anytime soon," said ANZ economist Madeline Dunk.
New Reserve Bank governor Michele Bullock might address the Australian economy and expectations for rate cuts on Tuesday afternoon, when she holds her first press conference following a meeting where the RBA is widely expected to leave rates on hold.
Every sector except health care finished lower on Monday, with mining dropping the most, by 2.7 per cent, on renewed fears about China's economy.
Fortescue fell 2.8 per cent to $28.90, BHP dropped 2.4 per cent to $46.45 and Rio Tinto retreated 2.2 per cent to $129.12.
Silver Lake Resources was the biggest loser among the ASX200, dropping 11.5 per cent to a one-month low of $1.12 after agreeing to merge with fellow WA goldminer Red 5 in a $2.2 billion all-scrip transaction. Red 5 shares gained 3.0 per cent.
Fletcher Building dropped 6.8 per cent to a three-month low of $3.98 after the New Zealand building and material company warned of major cost blowouts on two big projects, a convention centre in Auckland and an airport carpark in Wellington.
The Big Four banks finished mixed, with Westpac up 0.5 per cent to $24.18 and NAB adding 0.3 per cent to $32.34, while CBA dipped 0.3 per cent to $115.48 and ANZ fell 0.2 per cent to $27.21.
Pro Medicus helped buoy the health care sector, rising 3.7 per cent to an all-time high of $108.63 after the diagnostic imaging company said it would launch its medical imaging program on Apple's new virtual reality headset, the Vision Pro.
The system will be piloted at UC San Diego Health, where radiologist Dr Paul Murphy said the immersive, gesture-controlled three-dimensional imagery would create exciting opportunities to improve patient care.
Metcash was in a trading halt after the IGA supplier said it would spend around $558.5 million to acquire a leading restaurant food vendor and two hardware chains.
In tech, Appen sunk 5.4 per cent to an all-time low of 26.5c after chief executive Armughan Ahmad quit the struggling machine learning dataset company.
The Australian dollar had fallen to about a two and a half month low against its US counterpart, buying 65.10 US cents, from 65.96 US cents at Friday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Monday down 73.5 points, or 0.95 per cent, to 7,625.9.
* The broader All Ordinaries dropped 76 points, or 0.96 per cent, to 7,855.6
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 65.10 US cents, from 65.96 US cents at Thursday's ASX close
* 96.61 Japanese yen, from 96.62 yen
* 60.40 Euro cents, from 60.65 Euro cents
* 51.63 British pence, from 51.75 pence
*107.19 NZ cents, from 107.29 NZ cents.
