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SYDNEY, June 24 (Reuters) - Australian shares dropped 1.5 percent on Monday as investors remained anxious about the Federal Reserve's plans to taper monetary stimulus and slowing growth in China, causing financial and mining stocks to fall.
"Traders are still not warming to the idea of QE tapering as put forward by Bernanke last week," said Tim Waterer, senior trader at CMC Markets.
Financials dragged, with top lender Commonwealth Bank of Australia slipping 0.5 percent while National Australia Bank Ltd dropped 1 percent. Westpac Banking Corp fell 0.6 percent.
BHP Billiton Ltd dropped 3.4 percent while rival Rio Tinto Ltd lost 2.1 percent. Newcrest Mining tumbled 7.9 percent to near 10-year-lows of A$9.53, in an almost uninterrupted decline since 2011.
"Commodity prices have been weak for a while now, they're not improving and that's weighing on our miners," said Peter Esho, investment adviser at Wilson HTM Investment Group.
Rio Tinto has scrapped the proposed sale of its $1.3 billion diamonds business, a setback for its plan to sell a collection of mines and company stakes to tighten operations during a global industry downturn.
The S&P/ASX 200 index dived 69.7 points to close near 10-day lows at 4,669.1. The benchmark fell 1.1 percent last week.
The local bourse fared slightly better than the rest of the region. MSCI's broadest index of Asia-Pacific shares outside Japan was down 1.8 percent, after last week being it worst since May 2012 with a drop of 4.5 percent.
The Fed's plan to cut back on how much cheap money it pumps into the world's biggest economy has raised concerns about the impact on growth and prompted sharp adjustments in global asset markets.
"While the withdrawal of stimulus at some point is inevitable, this is still not something the market wants to contemplate given the less than impressive economic indicators we have witnessed from the U.S. and also China recently," CMC Markets' Waterer said.
However, stocks with exposure to the U.S. edged higher - helping to cap broader losses - supported by a weaker Australian dollar as earnings from abroad are boosted when repatriated home. Blood products maker CSL Ltd climbed 2.4 percent. Westfield Group was up 0.8 percent
The Australian dollar remained little changed against the dollar at $0.9218, holding above a 33-month trough of $0.9163 last week.
Australian insurance and wealth management company AMP Ltd plunged 12.9 percent to its lowest point since October 2012 after it warned that first-half underlying profit would slide due to high claims levels and an increase in number of policies not renewed.
New Zealand's benchmark NZX 50 index finished flat or up 1 point to 4,364. (Reporting by Thuy Ong; Editing by Richard Borsuk)