(Adds analysis, quotes, stocks on the move)
SYDNEY, Nov 18 (Reuters) - Australian shares fell 0.6 percent on Monday, pulled down by bluechip stocks in a broad sell-off after a bullish October, though sentiment was buoyed by Wall Street hitting new highs and a surge in takeover-target Warrnambool Cheese.
Banks and defensive stocks led the market lower, with Commonwealth Bank of Australia falling 0.7 percent, Westpac Banking Corp slipping 0.2 percent and Australia and New Zealand Banking Group losing 0.7 percent.
Blood products maker CSL Ltd shed 0.8 percent while top communications provider Telstra Corporation Ltd fell 0.7 percent.
"We've had a really strong run - perhaps some of this money has been switched out because some IPOs are coming into the market," said Lucinda Chan, division director at Macquarie Private Wealth.
"People are taking a bit of profit so they can buy into IPOs because there's a lot of new issues coming out of the market."
Consumer electronics retailer Dick Smith's IPO is due in December, while online jobs marketplace Freelancer Ltd soared on its debut last week. Australia's IPO market has picked up with more than $1 billion raised in the first three quarters of 2013 compared with $227 million over the same period a year earlier.
The S&P/ASX 200 index fell 30 points to 5,371.7 by 0046 GMT. The benchmark gained nearly 1 percent on Friday after dovish comments by U.S. Federal Reserve Chair nominee Janet Yellen.
The index has traded sideways for November, hovering around the 5,400 mark as investors fretted over when the U.S. Federal Reserve will begin to taper its massive bond-buying programme.
Canadian dairy company Saputo Inc raised its takeover offer for Australia's Warrnambool Cheese and Butter Factory Co Holdings Ltd by 12.5 percent on Friday, and Warrnambool's board unanimously recommended it. Warrnambool shares jumped 2.1 percent to A$9.29, touching record highs.
Miners fell as copper hovered near three-month lows after data showed a slowdown in infrastructure spending in the Chinese power sector.
Iluka Resources Ltd tumbled 2.8 percent while gold producer Evolution Mining Ltd dropped 4.7 percent and Sirius Resources NL lost 3.4 percent.
"Investors appear keen to 'sit on the bench'," said Niall King, sales trader at CMC Markets in a note to clients, adding that, "central bank 'accommodation' remains the crucial ingredient in the mix."
Elsewhere Downer EDI Ltd jumped 1.4 percent after the company received a notice of award for a 4-1/2 year contract with Roy Hill mining in Western Australia.
Medical Developments International surged 17.6 percent to A$1.50, a two-month high after the company said it had received approval from the U.S. Food and Drug Administration to sell its range of space chamber and medical devices in the United States.
New Zealand's benchmark NZX 50 index fell 0.4 percent to trade at 4,892.1 points.
Reporting by Thuy Ong; Editing by Stephen Coates