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SYDNEY- The Australian share market has closed down two and a half per cent as investors remain concerned about the continuing gloomy economic outlook.
The benchmark S&P/ASX200 index was down 95.1 points, or 2.54 per cent, at 3,653, while the broader All Ordinaries index lost 86.5 points, or 2.32 per cent, to 3639.5.
On the Sydney Futures Exchange at 1615 AEDT, the December share price index futures contract was 62 points lower at 3,695 on a volume of 28,232 contracts.
ABN AMRO Morgans private client adviser Bill Bishop said all sectors suffered from investor pessimism, predominantly influenced by a weaker Wall Street on Friday night.
"I think the bad news has been more or less unending, and unfortunately that has leaked into today's market," Mr Bishop said.
"There's just a bit of constant pressure from the situation, with credit markets still well and truly shut.
"Resources are suffering somewhat ... broadly speaking the industrial stocks have all really taken a turn for the worse, just on that constant pressure.
"Pretty much every other sector has got red figures in front of it."
Volumes on Monday were low as investors watched from the sidelines, Mr Bishop said.
"People are a bit deflated, they want to buy things but they can't," he said.
All the major banks recorded losses.
Commonwealth Bank shares fell 77 cents, or 2.4 per cent, to $31.33, National Australia Bank lost 86 cents, or 4.35 per cent, to $18.93, while ANZ dropped 54 cents, or 3.92 per cent, to $13.24.
St George Bank Ltd chief executive Paul Fegan has resigned after the bank's merger with Westpac Banking Group was approved by shareholders last week.
St George fell $1.10, or 4.74 per cent, to $22.10 and Westpac declined 48 cents, or 2.86 per cent, to $16.32.
Among the miners, BHP Billiton said it had no plans to cut production of the iron ore despite requests from some customers to defer shipments.
BHP shares lost $1.30, or 4.92 per cent, to $25.10 while its takeover target Rio Tinto gained $1.44, or two per cent, to $73.44.
Energy stocks were mixed after oil prices edged lower on Friday night.
Woodside lost $1.10 to 35.80 and Santos fell 35 cents to $13.15, while Oil Search added nine cents to $5.19.
In the news, brewer Lion Nathan Ltd has proposed a merger with Coca-Cola Amatil Ltd (CCA) in a cash and scrip deal worth $7.94 billion.
Coca-Cola Amatil said its board believed the incomplete and non-binding proposal had a number of "material deficiencies" and there was no assurance it would proceed.
Lion Nathan shares lost 30 cents, or 3.35 per cent to $8.65, while Coca-Cola Amatil was the day's big winner, gaining $1.06, or 12.85 per cent, to $9.31.
Building materials group James Hardie NV reported a fall in first half operating profit and declined to pay an interim dividend due to uncertain conditions in the American housing market.
James Hardie shares dropped 35 cents, or 7.37 per cent, to $4.40.
Investment manager Babcock & Brown Ltd (B&B) has warned of a potential loss in its property joint venture with GPT Group.
B&B shares fell seven cents, or 14.58 per cent, to 41 cents, while GPT lost 10 cents, or 8.93 per cent, to $1.02.
At 1636 AEDT, spot gold in Sydney was trading at US$740.85 an ounce, up US$11.70 on Friday's local close of US$729.15.
Gold stocks were weaker though, with Newcrest down 14 cents to $20.90, Newmont off 16 cents to $3.69 and Lihir Gold 8.5 cents weaker at $1.795.
Retail stocks were weaker, with Woolworths losing 38 cents to $27.90 and Coles owner Wesfarmers down 21 cents to $17.59.
The most traded stock was GPT Group, with 39.48 million units changing hands, worth a total of $39.79 million.
Preliminary market turnover was 1.02 billion shares, valued at $3.47 billion, with 275 stocks up, 710 down and 283 unchanged.
- AAP
