The S&P/ASX 200 index fell 1.4% to 7202.1 by 0020 GMT. The benchmark recorded its third consecutive weekly loss on Friday.
Data from the U.S. Commerce Department showed that consumer spending in January exceeded analyst estimates, stoking fears of more aggressive rate hikes by the Fed. Meanwhile, Australia's major banks are lifting their forecasts for interest rates in the wake of a decidedly hawkish turn in the central bank messaging, and despite some downward surprises on wages and jobs data in recent weeks. The Reserve Bank of Australia earlier this month flagged that additional rate hikes might be required to bring inflation under control. Local mining stocks led losses with a 3.2% drop on weak iron ore prices. Sub-index heavyweights BHP Group and Rio Tinto shed 2.8% and 2.6%, respectively. Technology stocks tracked Wall Street peers lower, down 1.7%. ASX-listed shares of Block Inc and Xero Ltd lost 1.7% and 2.7%, respectively.
Healthcare sub-index traded down 1.4%, with the biggest loser Imugene slipping 5.4%.
Financials fell 0.3%, but the "big four" lenders were marginally higher. Energy stocks dipped 0.8%. Shares of sector heavy-weight Woodside Energy jumped 0.8% after it reported a more than three-fold jump in annual profit, boosted by strong liquefied natural gas pricing in the wake of Russia's invasion of Ukraine.
Rare Earth minerals explorer Lynas Rare Earths reported a 4% drop in first-half profit, sending its sharing tumbling 2.2%.
New Zealand's benchmark S&P/NZX 50 index dropped 0.8% to 11,806.09.
(Reporting by John Biju in Bengaluru; Editing by Rashmi Aich)
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