* Investors nervous watching global markets - analyst
* Banks and miners lead losses (Adds analysis, quotes, stocks on the move)
By Charlotte Greenfield and Naomi Tajitsu
WELLINGTON, Sept. 7 (Reuters) - Australian shares fell 0.48 percent on Monday in broad-based losses with investors nervous of volatility in China's equities and share sell-offs in European and US markets.
The S&P/ASX 200 index .AXJO dropped 22.201.903 points to 5,018.400 by 0146 GMT. The benchmark edged up 0.25 percent on Friday, but closed the week 4.2 percent lower, its biggest weekly fall since June.
The market took a lead from Wall Street where U.S. stock indexes dropped more than 1 percent on Friday after a mixed August jobs report did little to quell investor uncertainty about whether the Federal Reserve will increase interest rates this month.
"We had a weak lead from offshore markets, another round of really substantial declines in the European and US stock markets on Friday night and that created an atmosphere of nervousness amongst local investors," said Ric Spooner, market strategist at CMC Markets.
"The second factor is that Chinese stock markets, which have been closed for holidays, with the initial futures opening implying a slightly weaker market there," he said.
The volatile Chinese equity markets have been closed for the last two sessions for a public holiday.
Financials lead losses with Westpac WBC.AX down 1.3 percent and NAB NAB.AX down 1.5 percent.
Mining also suffered heavy losses with BHP AHP.AX falling 2.3 percent and Rio Tinto (LONDON:RIO) RIO.AX down 1 percent.
Products developer Starpharma Holdings SPL.AX soared as much as 31 percent after the company signed a licensing agreement with AstraZeneca AZN.L.
Wave Energy Ltd CWE.AX rose as much as 4.3 percent after signing a collaboration agreement with the Mauritius Research Council.
TNG Ltd TNG.AX rose as much as 36.8 percent as the mineral explorer signed a deal with Korean Woojin Co Ltd.
New Zealand's benchmark NZX50 share index rose 9.3 points or 0.2 percent to 5,556.18 as a slide to a two-week intraday low of 5,542.03 in early trade prompted buying on dips.
Telecommunications retailer Spark rose 1.3 percent, while Air New Zealand AIR.NZ rose 1.4 percent. Stock exchange operator NZX rose 2.0 percent.
Gains were limited and shares remained at risk of selling if Chinese share prices extend deep losses when markets reopen there after last week's holidays.