The Australian share market capped its worst week since the global financial crisis by closing 1% lower as investors fretted over the possibility that the US Federal Reserve could soon raise interest rates.

The Australian dollar was also lower, trading at US71.42c, down from 71.67 cents on Friday.

Investors were underwhelmed by the combined profits of Australia’s biggest companies as the reporting season comes to an end.

Close to three-quarters of the nation’s top 200 corporations have just reported earnings results for the 2014-15 financial year, and CommSec’s chief economist, Craig James, said they were finding it tough. “It has been hard work for companies,” he said.
The combined profits of the 143 companies that delivered annual numbers dropped by almost a third from the previous year, to $35.9bn.

Investors were also wary as forecasts for Australia’s second quarter economic growth softened ahead of the Reserve Bank of Australia’s monetary policy meeting on Tuesday and official growth data on Wednesday.

Economic growth is forecast to have slowed to 0.5% in the June quarter, with an annual rate of 2.2%, according to an Australian Associated Press survey of 15 economists.

The ASX200 closed at 5,207 points on Monday, which represented a drop of 8.83% in August, its worst monthly performance since October 2008 at the height of the Lehman Brothers crisis.

The banks bore the brunt of the selling amid uncertainty about how shifts in the global economy might affect Australia’s huge financial sector.