The S&P/ASX200 dropped 77.4 points on Tuesday, down 0.88 per cent, to 8,672.5 , as the broader All Ordinaries lost 74.6 points, or 0.84 per cent, to 8,849.3.
"It's been another horrendous day for the local market," IG market analyst Tony Sycamore told AAP.
"September isn't a great month, we're down a lot more than the September average, and everyone's asking just what is going to be the catalyst for that turnaround."
Mining stocks weighed heavily after calls for AI safety guardrails dented copper prices, along with hopes the technology's massive infrastructure spend will reinvigorate global growth.
Segment giants BHP and Rio Tinto each dropped more than two per cent, as both copper and iron ore futures lost ground.
The local gold sub-index fell more than three per cent, as the precious metal eased to $US4,288 ($A6,020) an ounce, as interest rate hikes loom from central banks in the US and Japan.
Financials also dragged as bets narrowed on the Reserve Bank lifting interest rates this month, while stubbornly high oil prices and inflation expectations propelled Australian five-year and 10-year bond yields to levels not seen since 2011.
Despite Brent crude clinging to most of its recent gains to trade near $US107.60, Australia's energy sector tumbled 1.6 per cent as Woodside, Santos, Ampol and Viva were sold off.
Coal miners came back into favour with a strong lead from New Hope Corporation, which rallied despite a more than 60 per cent fall in full-year net profit to $161 million.
The health care sector surged 1.5 per cent with strong performances from CSL, ResMed and Telix, which rallied for a second session after winning US regulatory approval for its brain cancer imaging drug.
Consumer-facing stocks also improved, with both staples and cyclicals up 0.9 per cent on the day.
In company news, Nickel Industries shares dipped after flagging dry conditions had impacted the ramp-up of its Excelsior project, with output to drop to 30 per cent until later in the year.
CommBank's institutional banking and market group executive Sinead Taylor will replace Vittoria Shortt as ASB Bank's chief executive and managing director.Â
Ms Shortt is stepping down after nine years leading the CBA-owned bank.
The Australian dollar is buying 71.19 US cents, down from 71.37 US cents on Monday at 5pm ahead of a widely-tipped US interest rate hike later in the week.
ON THE ASX:
* The S&P/ASX200 fell 77.4 points, or 0.88 per cent, to 8,672.5
* The broader All Ordinaries lost 74.6 points, or 0.84 per cent, to 8,849.3
One Australian dollar trades for:
* 71.19 US cents, from 71.37 US cents at 5pm AEST on Monday
* 110.29 Japanese yen, from 110.10 Japanese yen
* 61.71 euro cents, from 61.78 euro cents
* 52.85 British pence, from 52.91 pence
* 123.65 NZ cents, from 123.46 NZ cents
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