(Corrects to add missing word "year" to headline)
By Cecile Lefort and Charlotte Greenfield
SYDNEY/WELLINGTON, Jan 11 (Reuters) - Australian shares plunged to 2-1/2-year lows on Monday, while their New Zealand peers also fell, as concerns about China's policymakers' ability to calm the country's share market took a toll on risk appetite.
The S&P/ASX 200 index .AXJO crumbled 1.6 percent, or 79.43 points, to 4,911.4 by 0105 GMT. The benchmark shed 5.7 percent last week, its largest such loss since 2011 and the worst opening week on record.
The absence of Tokyo for a holiday made liquidity even thinner, heightening volatility and sending investors to the safety of the yen and government bonds.
"Ongoing concerns about China, the Federal Reserve and commodity prices, it's all one-way traffic at the moment, resulting in very negative sentiment," said Ben Le Brun, a market analyst at OptionsXpress, seeing key support for the index around 4,900.
Losses were across the board, but heavyweight resource sector was among the hardest hit with miner BHP Billiton (L:BLT) BHP.AX at a fresh 10-year low. Rio Tinto (L:RIO) RIO.AX skidded 4 percent to its weakest in 7 years.
Investors sold the financial sector with Australia and New Zealand Banking Group ANZ.AX , Westpac Banking Corp WBC.AX and Commonwealth Bank of Australia CBA.AX at least 1.5 percent lower. National Australia Bank NAB.AX plumbed its weakest levels since mid-2013, while Macquarie Group fell 3.6 percent.
Likewise, there was not much love across the Tasman Sea with New Zealand's benchmark NZX 50 index .NZ50 off 0.9 percent or 56.7 points to 6,101.410, heading for its fifth session of losses on Monday.
Sky TV SKT.NZ led losses, falling 2.12 percent whilst Fletcher Building FBU.NZ lost 1.7 percent.
Accounting software company Xero XRO.NZ lost 1.14 percent, continuing to edge down after a rally in the final days of last year.
The biggest gainer was Z Energy Ltd ZEL.NZ which rose 1.2 percent as investors sought bargains from the energy retailer's lower price after five consecutive sessions of falls.
(Editing by Simon Cameron-Moore)