The local benchmark fell to a two-month low on Tuesday as equities continue their correction after a round of central bank meetings last week signalled interest rates would need to stay higher for longer.
The S&P/ASX 200 sank by 38.4 points, or 1.3 per cent, to 2949 points as bond yields surged higher.
US 10-year treasuries now sit at their highest level since October 2007, climbing to 4.56 per cent on Monday (Tuesday morning AEST).
The All Ordinaries also fell, slipping 40.3 points, or 0.6 per cent, to ,238.3 points.
Nine of 11 sectors across the benchmark finished in the red, led by losses in tech and materials. Health stocks were the best performing, up 1.1 per cent.
Technology stocks were the worst performing, falling 1.93 per cent, with software heavyweight Xero plunging 2.6 per cent and dragging the sector lower.
Wisetech also dropped 1.7 per cent to $66.77 a share, while Altium shed 1.8 per cent to $43.69
Iron ore miners also fell. Rio Tinto slipped 2 per cent to $110.90, BHP was down 1.9 per cent to $43.30, and Fortescue dropped 2.1 per cent to $20.11 after iron ore futures in Singapore fell 1.2 per cent to $US114.80 a tonne on the October contract.
In company news, Qantas stocks dropped to their lowest levels since October after the Australian and International Pilots Association (APIA) called for board chair Richard Goyder’s head.
“The morale of Qantas pilots has never been lower. We have totally lost confidence in Goyder and his Board,” APIA president Tony Lucas said in a statement.
Qantas stocks now sit at $5.16 a share, down from a peak of $6.79 in June.
Mining magnate Gina Rinehart increased her stake in lithium miner Liontown Resources to 10.69 per cent, further complicating North Carolinian miner Abermarle’s $3-a-share takeover offer. Liontown shares slumped 1.7 per cent.
Pro Medicus surged 12.4 per cent after the imaging company won a $140m contract with US healthcare giant Baylor Scott & White Health.
Nabtrade director of SMSG and investor behaviour Gemma Dale said it had been a “rough” last five days of trading, with the local sharemarket losing almost 2 per cent of its value.
“Markets are starting to think about the fact that bond yields are where they are after such a long time, while equity markets are holding up,” she said.
However, Ms Dale said markets were faring better than expected if investors were prepared for a weaker result.
“If the weakness is very clearly flagged … you’ll find some buyers in the morning and they were sufficient to drive us back to a better position last week,” she said.
Australia‘s monthly inflation data for August is due Wednesday.