The sharemarket lost 2 per cent as spooked investors sold off local stocks amid bailout plans for Cyprus.
At the close today, the benchmark S&P/ASX200 index was down 104.8 points, or 2.05 per cent, at 5015.4.
The broader All Ordinaries index was down 101.9 points, or 1.99 per cent, at 5027.4.
Some Cypriots started lining up at ATMs at the weekend to withdraw money after an agreement was struck to impose a levy on bank deposits.
CommSec market analyst Juliette Saly said stocks were sold off in Australia and Asia as investors focused on Cyprus.
"That controversial bank bailout in Cyprus brought some fresh concerns about Europe's debt crisis," Ms Saly said.
Worries that the move could be spread to other high debt European nations, spurring a repeat of the recent dramas there, led to nervous selling all day on the Australian stock exchange.
