Resource stocks bore the brunt of the selling on concerns a US default will curb demand for commodities.
BHP fell 2.3% and Rio Tinto dropped 1.7%.
The big four extended yesterday’s losses; CBA dipped 0.8% and Westpac gave up 1.8%.
The consumer staples giants were also weaker; Woolworths lost 0.7% and Wesfarmers shed 2.4% despite reporting a rise in full-year Coles sales.
The ASX 200 slumped 74 points (-1.6%), closing at 4464.