The Australian share market has suffered its worst session in seven weeks, slumping badly after a blowout US jobs report pushed back expectations for when interest rate cuts would begin.
The benchmark S&P/ASX200 index on Tuesday finished 104.6 points lower at 7,755.4, a drop of 1.33 per cent, giving back the bulk of last week's 158.3 points of gains.
The broader All Ordinaries dropped 106.9 points, or 1.32 per cent, to 8,005.9.
It was the ASX200's worst daily decline since a 107-point, 1.39 per cent drop on April 26.
"Investors had a lot of negativity to price in today, so the ASX200 took a tumble," said Capital.com analyst Kyle Rodda.
Surprise inroads by far-right parties in the European Union's parliamentary elections over the weekend hurt risk appetite and sent the US dollar higher, which led to softer commodity prices, Mr Rodda said.
Also, US jobs data known as the non-farm payrolls report late on Friday night AEST showed the world's largest economy gained 272,000 jobs last month, beating every economic estimate and pushing back estimates on how quickly the Federal Reserve would begin cutting interest rates.
The market is now pricing in just 50/50 odds for a Fed rate cut in mid-September, down from two-in-three odds a week ago, according to the CME FedWatch Tool.
Market participants could get more insight on the Fed's thinking this week when the rate-setting Federal Open Market Committee (FOMC) concludes its latest two-day meeting early on Wednesday AEST.
No changes in interest rates are expected but the FOMC will release its latest "dot plot" projections on where rates are headed.
A similar outcome is anticipated when the Reserve Bank's board holds its own meeting early next week.
Every sector except consumer discretionaries finished in the red on Tuesday, with the mining sector the biggest loser, down 2.6 per cent on the drop in commodities prices.
BHP fell 1.8 per cent to $43.74, Fortescue dropped 3.2 per cent to $23.60 and Rio Tinto retreated 1.9 per cent to $122.91.
Goldminers took a bruising as the price of the non-yield-bearing asset dropped to a near six-week low of $US2,300 an ounce on the stronger US dollar and likelihood of slower rate cuts.
Newmont fell 3.3 per cent, Evolution dropped 6.5 per cent and Northern Star lost 5.1 per cent.
In the energy sector, uranium developers and coalminers were also deep in the red. Paladin Energy shed 5.5 per cent and Whitehaven Coal slid 3.9 per cent.
Elsewhere in the sector, Woodside finished down 0.4 to $27.09 per cent as the energy giant said it had achieved first oil from its Sangomar field off Senegal, the West African country's first offshore oil project.
All big four banks finished lower as well, with CBA down 0.5 per cent to $124.93, ANZ sliding 0.9 per cent to $28.91, and Westpac and NAB both retreating 1.0 per cent, to $26.69 and $34.87, respectively.
Bapcor helped the consumer discretionary sector stay in the green, soaring 14.0 per cent gain to a five-week high of $4.97 as the struggling Autobarn owner confirmed it had received a tentative takeover offer from Bain Capital at $5.40 per share.
Bapcor had appointed Macquarie Capital as a financial advisor as it considered the non-binding $1.8 billion indicative offer.
The Australian dollar was buying 66.08 US cents, down from 66.72 US cents at Friday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index on Tuesday dropped 104.6 points, or 1.33 per cent, to 7,755.4.
*The broader All Ordinaries fell 106.9 points, or 1.32 per cent, to 8,005.9.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 66.08 US cents, from 66.72 US cents at Friday's ASX close
* 103.79 Japanese yen, from 103.70 Japanese yen
* 61.28 Euro cents, from 61.26 euro cents
* 51.82 British pence, from 52.18 pence
* 107.77 NZ cents, from 107.70 NZ cents
