Australian shares ended at a more than one-month low on Thursday, led by losses in the financial index, as the possibility of another U.S. rate hike and slowing growth in China sapped investor confidence.
The S&P/ASX 200 index lost 0.7% to 7,146 points, tipping to its lowest since July 7. The benchmark lost 1.5% on Wednesday.
Global sell-off continued as minutes of the Fed's July rate-setting meeting showed officials were divided on the need for more interest rate hikes, although "most" policymakers saw fighting inflation as still their top priority.
Ongoing concerns related to the health of the Chinese economy continued to impact the market as the recent rate cut did little to constrain the downturn in stocks. Investors worry about the weakening fuel demand in the world's two biggest economies.
In Australia, employment unexpectedly fell in July to end two months of very strong growth, while the jobless rate ticked higher.
On the domestic bourse, the financial sub-index slipped nearly 1%, logging its worst day in two weeks. All major banks lost between 0.2% to 2.1%.
"Investors in U.S. banks remain on edge over tighter regulations and possible downgrades from credit rating agencies - a sentiment felt today in the ASX200 financial sector," Tony Sycamore, a market analyst at IG Markets, said in a note.
Miners also fell, skidding 0.6%.
Mining giants Rio Tinto and Fortescue Metals fell 1.1% and 0.3%, respectively.
Energy companies closed 0.4% higher despite weak oil prices, as investors hoped for more stimulus from China.
In corporate news, telecoms major Telstra Group plunged to a five-month low after the company decided against selling a stake in InfraCo Fixed.
New Zealand's benchmark S&P/NZX 50 index slipped 0.95% to end the day at 11,651.58 points.
(Reporting by Aishwarya Nair in Bengaluru; Editing by Eileen Soreng)