Australian shares slid 0.9 percent on Monday to their lowest level in 1-1/2 months led by selling in banking and industrial stocks as heightened risk aversion in the wake of Friday's deadly attacks in Paris swept regional markets. French warplanes pounded Islamic State positions in Syria on Sunday as police in Europe widened their investigations into co-ordinated attacks in Paris that killed more than 130 people.
The S&P/ASX 200 index tumbled 47.46 points to 5,003.80, extending Friday's 1.4 percent slide. Earlier, the benchmark dipped below 5,000 - a key psychological support - for the first time since late September. The index skidded over 3 percent last week, its biggest drop since the week-ended September 4, and is on track for its worst monthly performance since August. New Zealand's benchmark NZX 50 index slipped to a 3-week low to finish the session down 0.5 percent or 27.36 points at 5,961.67.
Police in Europe have widened their investigations into Friday's attacks, which were the worst atrocity in France since World War Two. Analysts said the negative market reaction was expected and likely to be short lived barring any unexpected developments. "Since the Twin Towers attacks, there have been four major attacks across the globe," said Evan Lucas, market strategist at IG in Melbourne.
"The initial reaction in all jurisdictions were short, sharp sell-offs, but within 10 days of the events, the markets or local currency returned to the level of before the events. I would expect the same reaction for the Paris events." Weighing on the index were the big four banks, which suffered losses of 1 percent or more each. Australia and New Zealand Banking Group fell 1.5 percent. Embattled miner BHP Billiton eased 0.2 percent, staying near its lowest in seven years set on Friday.
New Zealand's benchmark NZX 50 edged down 0.7 percent, or 41.81 points, to 5,948.22. It fell as far as 5,945.60, its lowest in three weeks. Among the biggest losers, software company Xero lost 2.8 percent, and Sky City shed 2.4 percent. Kathmandu fell 1.9 percent as Morningstar downgraded the retailer to hold from accumulate. Bucking the trend, Fonterra's fund rose 1.9 percent after the company announced it was increasing its earnings per share forecast by 5 NZ cents on Monday. Also firmer, shares in Ebos Group climbed 0.4 percent after the healthcare products distributor announced a deal to acquire natural health products business Red Seal.
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