The Australian share market closed weaker on Monday, dragged lower by banks and miners, as investors remain cautious about the US economic outlook. The benchmark S&P/ASX200 index finished down 37.1 points, or 0.79 per cent, at 4,651.9 points, while the broader All Ordinaries index was 34.8 points lower, or 0.73 per cent, at 4,723.4 points. On the Sydney Futures Exchange, the December share price index contract was 45 points lower at 4,657 points, with 23,568 contracts traded. On the S&P/ASX50, around four stocks fell for every one rising. US banks dragged the Dow Jones industrial average lower on investor uncertainty surrounding major banks' exposure to foreclosures. The domestic banks followed the weak lead from US counterparts. Westpac was the weakest performer of the big banks, down 30 cents, or 1.31 per cent, to $22.63. ANZ finished down 23 cents at $23.58, CBA lost 45 cents to $50.65 and NAB slipped 17 cents to $25.32. The major miners were lower after BHP Billiton and Rio Tinto announced they have formally scrapped plans for a $US116 billion joint venture in the Pilbara. BHP Billiton closed down 47 cents, or 1.13 per cent, to $41.18, while Rio was down 22 cents, or 0.26 per cent, at $82.98.

In market news on Monday, gambling firm Tabcorp Holdings said it would demerge its casinos operations from its wagering, gaming and keno businesses to create two separate Australian-listed entities. The gamer said it will also raise $430 million in fresh capital, after announcing the departure next year of its chief executive Elmer Funke Kupper. Tabcorp shares were in a trading halt on Monday, having closed on Friday at $7.10. Fortescue Metals Group Ltd announced it had launched an international roadshow to offer $US2.04 billion worth of senior unsecured notes to fund its iron ore mine expansion plans. Fortescue Metals closed 10 cents lower at $6.31. Shares in Challenger Financial Services Group finished stronger after the company unveiled record quarterly sales for its life annuities business. Challenger closed up 18 cents, or 3.9 per cent at $4.80.

The spot price of gold in Sydney was $1,361.20 per fine ounce, down $19.20 from Friday's local close of $1,380.40. Gold miner Newcrest Mining closed down $1.15, or 2.73 per cent, to $40.93. The most traded stock by volume was Abm Resources, with 117.63 million shares worth $4.26 million changing hands. Shares in Abm Resources closed down 0.2 cents, or five per cent, at 3.8 cents. Preliminary market turnover was 2.26 billion securities worth $4.03 billion, with 485 stocks up, 642 down and 361 unchanged.

The Australian dollar weakened in thin Asia trade Monday, retreating from the parity levels traded in New York Friday as traders pared U.S. dollar short positions. The coming week is expected to be relatively quiet for the local currency with minutes from the Reserve Bank of Australia's October meeting due Tuesday the highlight. Dealers will be looking for a broader explanation as to why the RBA kept rates steady this month and whether they will act on a tightening bias in November. Also of note will be whether the central bank remarks on the currency's strength and if that was a factor in its decision to keep its overnight target on hold at 4.50%. After trading parity for the first time since floating in 1983, hitting $1.0003 in New York Friday, the local unit could slip back to the $0.9700 area as dealers increasingly price in further possible quantitative easing in the U.S. given a speech by Federal Reserve President Ben Bernanke on Friday signalled more work needs to be done. Treasurer Wayne Swan continued the government's long practised theme of ignoring the local unit's traded levels, telling parliament calls by the opposition to artificially weaken the currency are dangerous. The Australian dollar traded at $0.9854, down from $0.9917 late Friday, and traded the Yen at 80.075, down from 80.615.