The nation's biggest insurer, QBE Insurance fell 5.5 percent after posting a 37 percent fall in half-year net profit while mining contractor Macmahon Holdings skidded over 17 percent after announcing a bigger-than-expected full-year net loss. Coca-Cola Amatil posted first-half profit that missed analyst estimates; shares fell 5.5 percent.
(Read more: In Australia, manufacturing's not dead, just changing)
On the bright side, iron ore and steel producer Arrium surged nearly 17 percent despite its full-year profit tumbling 14 percent.
The index was little changed after the minutes of the Reserve Bank of Australia's (RBA) latest policy meeting suggested that future rates cuts were possible, but not imminent. The central bank also said the Aussie dollar had more room to fall, which saw the currency fall below the $0.91 handle.
Shanghai eases 0.6%
China's benchmark index managed to avoid the rest of Asia's sharp losses as confidence rose after the central bank governor pledged more financial support for the economy and said that policy could be fine-tuned in the second-half of this year.
"We continue to expect further targeted stimulus measures and a 7.7 percent GDP growth this year," wrote analysts at Credit Agricole in a note.
Railway stocks rallied after Beijing pledged more investment in the sector. Daqin Railway climbed 4.5 percent while China Railway Construction rose 1.6 percent.
(Read more: Made in China: Can China build an Apple or Ikea?)
Meanwhile, shares of Everbright Securities dropped the maximum trading limit of 10 percent as it resumed trade in Shanghai for the fist time since Friday, when a trading error caused a 5.6 percent spike in the benchmark index.
— By CNBC.com's Nyshka Chandran. Follow her on Twitter @NyshkaCNBC