SYDNEY, AAP – Fortescue Metals shares were down more than nine per cent and adding more weight to a downbeat Australian market.

The market had been down by as much as one per cent on Monday as investors followed Wall Street’s moves after disappointing US jobs data late last week.

Heavyweight miner Fortescue was trading ex-dividend after last month promising a bumper final dividend of $2.11 per share. Its shares on the ASX were lower by 9.47 per cent to $18.87.

Most industry categories were lower. Energy shares had the steepest falls of more than two per cent.

The energy losses come after oil exporter Saudi Arabia slashed crude prices for Asia, signalling that global markets are well supplied.

Materials shares fared next worse and lost almost one per cent.

The benchmark S&P/ASX200 index was lower by 51 points, or 0.67 per cent, to 7471.9 at 1200 AEST.

The All Ordinaries was down 57.8 points, or 0.73 per cent, to 7768.9.

Australian and US markets remain near record highs due to low interest rates amid the pandemic.

In the US, some market participants bet a weaker economy could undercut the case for the Federal Reserve to unwind its market-supportive easy money policies.

Analysts are wondering whether the Reserve Bank of Australia will do similarly when it meets on Tuesday.

The RBA plans to taper bond buying from $5 billion per week to $4 billion per week.

However, the economy is set to contract as millions of people across the ACT, NSW and Victoria remain in lockdown.

A hospitality provider is suing insurer IAG for not covering business losses caused by COVID-19.

CMC Hospitality has filed an application in the Federal Court.

IAG and other insurers are mounting a separate challenge to the court to avoid having to pay out businesses’ losses caused by the virus.

IAG shares were down 0.92 per cent to $5.35.

Santos and Oil Search are extending the due diligence period for their proposed merger by a week.

Santos last month proposed buying all shares in the energy provider for 0.6275 Santos shares per Oil Search share.

The due diligence period will end on September 13.

Santos shares were lower by 2.88 per cent to $6.07.

Oil Search shares were down 3.26 per cent to $3.70.

In mining, BHP and Rio Tinto fared much better than Fortescue. BHP lost 0.28 per cent to $42.23. Rio Tinto shed 0.11 per cent to $111.50.

In banking, the big four banks were all lower by less than one per cent.

The boss of home builder AV Jennings will step down at the of March.

Peter Summers, who has been at the helm for 12 years, has let the board know he wants to move on.

The company will look for his replacement.

Shares were up 1.62 per cent to 62 cents.

Other major shares trading ex-dividend included Ramsay Health Care, software vendor Altium and goldminer Northern Star.

The Australian dollar was buying 74.39 US cents at 1200 AEST, higher than 74.21 US cents at Friday’s close.