Another session of hefty losses meant the local sharemarket posted its worst monthly performance in nearly seven years as concerns over China's growth and the timing of the next interest rate rise in the United States continued to weigh on investors' minds.
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The benchmark S&P/ASX 200 Index on Monday shed 1.1 per cent to 5207.0, while the broader All Ordinaries Index fell 1 per cent to 5222.1.
The day's poor performance was an apt way to end the month as the ASX 200 plummeted 8.6 per cent in August; the worst monthly performance since the height of the global financial crisis in October 2008 when it fell 12.7 per cent.
Heavy selling in the big banks and energy stocks weighed heavily on the market.
It was a month driven by concerns about global growth and, in particular, China's economic slowdown. Disappointing data and attempts by China's central bank to stimulate the economy by devaluing the currency rocked global markets and sent the benchmark Shanghai Composite Index into a tailspin.
For the first time since 2013, the ASX 200 traded below 5000 points, reaching a nadir of 4928.3 on Tuesday last week. At that point, the market was down 13.5 per cent for the month; worse than the peak monthly decline during the GFC.
Despite last week's recovery in global markets, overseas leads were poor for Australian shares on Monday.
The Dow Jones was flat on Friday.
At the weekend, US Federal Reserve vice chairman Stanley Fischer kept the door open to an interest rate rise in September, surprising investors who had hoped the recent market turmoil would prompt the central bank to postpone its planned monetary tightening.
"Given the apparent stability of inflation expectations, there is good reason to believe that inflation will move higher as the forces holding down inflation dissipate further," Mr Fischer said at the Kansas City Fed's annual retreat in Jackson Hole, Wyoming.
Sentiment was also affected by China's sharemarket falling 3 per cent in afternoon trade. Japan, Singapore and other Asian bourses were also in the red.
"There wasn't much of a lead from Wall Street and Europe and the market's been clubbed a bit after a couple of days of pretty solid recovery," Matt Sherwood, head of investment market research at Perpetual, said.
"There's been quite a bit of discussion about what vice chairman Fischer said. If you were thinking there was no chance they would hike in in September, then statements like that would make it sound like it was a bit up in the air, that they could still do it."
The two big factors weighing on the market – Federal Reserve policy and China's slowdown – were unresolved, Mr Sherwood said.
"This afternoon, China's off and Japan's off and that's weighing on regional indices," he said.
"There's increased risk globally from weaker growth, particularly outside of the US, and investors are starting to vote with their cash about what they want to do."
Woolworths dropped 3.6 per cent to $26.40 as news emerged that Moody's and Standard & Poor's had downgraded the supermarket operator's credit rating.
The downgrade came on top of an ongoing clean out at the board and executive manager level and as analysts warned profits could fall more than 10 per cent this year amid the growing risk of a full-blown price war.
On Friday, the retailer reported a 12.5 per cent fall in full-year net profit to $2.15 billion. Net profit before one-off costs was flat, for the first time since 1995, at $2.45 billion.
Competitor Wesfarmers was down 1.9 per cent on Monday at $40.66.
The big banks sold off again as ANZ fell 2.1 per cent to $27.93, Commonwealth Bank lost 1.7 per cent to $75.08, National Australia Bank shed 1.3 per cent to $31.17 and Westpac declined 1.5 per cent to $31.10.
Among the big miners, BHP gave back 1.2 per cent to $25.18 and Rio Tinto dropped 1.6 per cent to $50.29.
In other market news, glove and condom maker Ansell said it would buy back up to $US100 million ($139 million) worth of its shares to boost returns to shareholders.
The $3.3 billion global protective equipment group said on Monday that it would launch the share repurchase "no earlier than September 15".
The news pushed Ansell 0.8 per cent higher to $22.13.
Global share registry Computershare had said the acquisition of class action claims administrator Gilardi & Co for up to $US41 million on Friday would give it a return on capital of 15 per cent after three years.
The move coincides with a $140 million share buyback program to halt its falling share price. It is due to start on September 1.
However, shares still dropped 1 per cent to $9.90.