At closing bell, the benchmark S&P/ASX200 index was down marginal 1.69 points, or 0.03%, to 5,926.09. The broader All Ordinaries shed 4.36 points, or 0.07%, to 6,053.94.
Investor sentiment was ruffled on fears about the long-term economic damage from tighter lockdowns in Victoria. On Monday afternoon Premier Dan Andrews confirmed retailers would be closed except for hygienic collection or delivery methods, construction sites would be reduced to a skeleton staff, and abattoirs would be scaled back to 30% capacity. Stricter lockdown conditions were expected to affect about 250,000 Victorians and raised concerns about employment and economic growth.
Further, the country's second-largest city Melbourne imposed a nightly curfew, as part of the country's harshest movement restrictions to date, while the neighbouring states of New South Wales and South Australia also stepped up precautions.
The financial sector dropped, with National Australia Bank and ANZ falling more than 4%, Westpac dropping to 3.5%, and Commonwealth Bank falling 1.8%.
Consumer discretionary sector stocks fell, with sharp falls of between 6% and 7% in travel companies. Wesfarmers and Aristocrat Leisure suffered, receding 1.4% and 1.5%, respectively.
Materials stocks advanced with Rio Tinto and BHP Group climbing 1% and 1.6%, respectively, on strong demand as China, the world's top steel producer, continued to ramp up production.
ECONOMIC NEWS: Australia AiG Manufacturing PMI Expands to 53.5 in July-- Australia manufacturing sector continued to expand in July with a seasonally adjusted Performance of Manufacturing Index score of 53.5, the latest survey from the Australian Industry Group revealed on Monday, up from 51.5 in June. The expansion in July was driven by the two largest manufacturing sectors in terms of employment: the large food and beverage and machinery and equipment sectors. All other sectors reported difficult trading conditions due to the impact of COVID-19.
CURRENCY NEWS: The Australian dollar changed hands at $0.7117 after slipping from levels above $0.72 last week.
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