The sharemarket closed down more than 1 per cent after better-than-expected jobs data lowered the chance of another interest rate cut.
At the close today, the benchmark S&P/ASX200 index was down 60.2 points, or 1.18 per cent, at 5032.2
The All Ordinaries index was down 60.6 points, or 1.19 per cent, at 5043.8.
Analysts say interest rates will stay on hold for much of 2013 because of the jobs figures released today.
IG Markets strategist Evan Lucas said weaker commodities prices also affected the market, with the big miners registering steep falls.
"The iron price fell to around $US139 per tonne overnight and started the rout with regards to the materials sector," he said.
"And the reason the jobs data has impacted the market quite heavily is because it rules out the likelihood of a rate cut anytime soon."
Australia recorded its strongest jobs growth in more than a decade in February, with total employment rising by 71,500.
The weakness on the local market came despite stocks in the US posting their longest winning streak in more than 16 years.
Australia's biggest miners Rio Tinto, BHP Billiton and Fortescue Metals Group all suffered losses.
BHP Billiton fell 82c to $35.09, Rio Tinto reversed by $1.40 to $60.70 and Fortescue Metals Group lost 26c to $3.97.
The major banks were mixed, with National Australia Bank 26c lower at $30.69, ANZ was down 30c at $28.18, Commonwealth Bank fell 50c to $68.88 and Westpac was down 37c at $30.13.
Myer shares were 17c, or 4.1 per cent, higher at $3.07 after posting a better-than-expected first-half profit of $88 million.
Freight rail operator Aurizon gained 3c to $4 after it won a coal haulage contract in Queensland with mining giant Xstrata.
On Wall Street, the benchmark Dow Jones Industrial Average set a new record closing for the seventh straight day.
The March share price index futures contract was down 66 points at 5033, with 48,057 contracts traded.
National turnover was 999.7 million securities worth $2.25 billion.
