Evolution Mining was among the weakest large-cap stocks. Its shares tumbled 6.5 per cent. Alumina lost 6.1 per cent and coal producer South32 dipped 5.2 per cent.

Other market heavyweights also declined, with CSL down 0.9 per cent and the big four banks all falling. Commonwealth Bank lost 0.5 per cent, Westpac fell 1.1 per cent, NAB retreated 1 per cent and ANZ shed 0.9 per cent.

The energy sector, which had held out better than most in early trading after oil prices hit a one-week-high, finished 1.2 per cent lower.

The lowdown

Capital senior financial market analyst Kyle Rodda said the surprise results from the European election hurt risk appetite and pushed the US dollar higher, impacting commodity prices and Australian mining stocks.

“The markets look ahead cautiously to a back-loaded week of data. The [Federal Reserve] decision is the highlight and will be prefaced by the monthly US inflation figures,” he said. “It’s widely expected that the [Fed] will reduce the number of projected [interest-rate] cuts this year. Given that it’s a near certainty that the Fed won’t adjust policy at this meeting, expecting the Fed to cut three more times from the four remaining meetings, as would be implied, stretches credulity.”

The local market jitters came despite a strong session on Wall Street overnight, where the S&P 500 Index rose 0.3 per cent, topping its record high set last week. The Nasdaq Composite Index also set a record with a 0.3 per cent gain. The Dow Jones Industrial Average gained 0.2 per cent.

Data on the world’s largest economy has been mixed, and traders are hoping they will ultimately show a slowdown in that stops short of a recession. A cooldown would put less upward pressure on inflation, which could encourage the Fed to cut its main interest rate from its most punishing level in more than two decades.

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