(Updates to close) Australian shares fell on Monday as a...

(Updates to close)

Australian shares fell on Monday as a resurgence of COVID-19 cases in Europe prompted fresh lockdowns and painted a bleak picture of post-coronavirus recovery for the global economy.

The S&P/ASX 200 index (xjo) closed 0.59% lower at 7,353.1 after two straight sessions of gains.

Argonaut's director of equity sales, Damian Rooney, said the market was down because of "a poor lead out of the U.S. on Friday night and the weekend news, particularly on the situation in Europe."

Travel stocks were among the top losers, with three of the top 10 decliners on the benchmark index belonging to the sector. Travel management firms Flight Centre Travel Group (FLT) and Corporate Travel Management (CTD) , and carrier Qantas (QAN) fell between 4% and 7.1%.

Banking stocks .AXFJ closed 1.4% lower after hitting their weakest level since Aug. 2. The so-called "Big Four" banks lost between 1.2% and 2.1%.

Rooney attributed the sell-off to last week's brokerage downgrades in the sector after Commonwealth Bank of Australia (CBA) became the third lender among the top four to flag margin pressures, and the weaker Australian dollar.

Energy stocks .AXEJ dropped 1.6%, hitting their lowest in nearly a month as oil prices slid to a seven-week low.

Miners .AXMM rose 0.5%, offering some support to the benchmark index. Iron ore prices jumped 4%, sending sector heavyweights BHP Group (BHP) , Rio Tinto (RIO) and Fortescue (FMG) up between 0.4% and 2.1%.

Vulcan Energy (VUL) climbed 7.1% to become the second-highest gainer on the index after it signed its second supply agreement with Renault SA RENA.PA for battery-grade lithium chemicals.

New Zealand's benchmark S&P/NZX 50 (nz50) ended 1.04% lower at 12,607.64, with Meridian Energy (MEL) hitting a more than 16-month low on selling its Australian unit.