Australian shares fell on Thursday as global bond market fears rattled investors, with banks and miners leading the decline.

The S&P/ASX200 dropped 66.8 points, or 0.77 per cent, to 8660.9. The broader All Ordinaries lost 71.4 points to 8823.2.

Markets tracked a weak overnight session as US borrowing costs tightened and European bond yields spiked on France’s sovereign debt worries.

Banks weighed heavily. Analysts pointed to pressure from higher mortgage rates and falling consumer confidence after the Reserve Bank lifted the cash rate to 4.60 per cent, a 15-year high.

Miners also slumped. BHP fell to $61.19 and Rio Tinto dived 2.9 per cent to $161.97 after a disappointing Fortescue production update showed iron ore sales well short of shipments.

The US 10-year Treasury yield climbed to around 5.30 per cent, a level not seen in about 24 years, making equities less attractive.

It was the latest volatile session in a rough stretch for the ASX, which is tracking toward a fifth straight weekly decline.