The benchmark ASX 200 index ended 1.8 per cent lower at 7,235.3, moving further away from a record high hit last week.
Commonwealth Bank of Australia dropped over 5 per cent, its sharpest fall in more than a year, after announcing the long-anticipated sale of its Australian general insurance business for about A$625 million ($468.8 million).
Riskier assets were also broadly weaker after Fed official James Bullard said on Friday that the U.S. central bank might raise interest rates sooner than previously expected, spooking investors.
Miners also weighed on the resource-heavy bourse, with Rio Tinto and Fortescue Metals Group down around 2.7 per cent each as copper and iron ore prices retreated.
Retailers Harvey Norman Holdings Ltd and JB Hi-Fi Ltd slipped 1.7 per cent and 0.5 per cent, respectively, after data showed retail sales rose less than expected in May due to lockdowns in the second-most populous state of Victoria.
Elsewhere, construction materials supplier Boral Ltd pared some gains to end 1.5 per cent higher.
Boral had earlier touched hit its highest since late 2018 after saying it would sell its North American building products business to Westlake Chemical Corp, throwing a spanner in the works of a takeover bid by Seven Group.
Across the Tasman sea, New Zealand’s benchmark NZX 50 index fell 0.4 per cent to 12,499.36.
A2 Milk Company Ltd was the top loser on the bourse, losing about 3.7 per cent. ($1 = 1.3333 Australian dollars)
