(Updates to close) Australian shares tumbled on Monday, dragged...

(Updates to close)

Australian shares tumbled on Monday, dragged down by financials and materials, as investors were rattled by talk the Federal Reserve might hike U.S. interest rates next week.

The S&P/ASX 200 index (xjo) finished down 119.58 points, or 2.2 percent, at 5,219.6, its lowest since July.

Basic materials and energy stocks slid on the back of a strong dollar. [.DXY]

Mining giants BHP Billiton Ltd (BHP) and Rio Tinto Ltd (RIO) shed 4 percent and 2.5 percent, respectively.

Energy stocks .AXEJ fell to their lowest in over two months as oil prices tumbled, with Woodside Petroleum (WPL) and Oil Search (OSH) sliding more than 2.5 percent.

The “Big Four” banks declined between 0.9 percent to 2.6 percent.

New Zealand's benchmark S&P/NZX 50 index (nz50), which lost nearly 1 percent on Friday, fell 2.5 percent, or 188.84 points to its lowest in over a month at 7,279.76.

Financials, utilities and industrials dragged the index down.

Air New Zealand Ltd (AIR) was among the big losers on the benchmark, down 5.4 percent, while Tower Ltd (TWR) lost the most at 5.9 percent lower.