At 12.00pm (AEDT), the benchmark S&P/ASX200 index was down 38.2 points points, or 1.06 per cent, at 3577.5 points.
The broader All Ordinaries index was 37.2 points, or 1.06 per cent lower, at 3510 points.
CMC Markets analyst David Taylor said a weaker lead from Wall Street on Friday and lower volumes were keeping the local market down.
"This is typical of the Christmas period when investors will stay on the sidelines,'' Mr Taylor said.
"At the moment, there is also a lot of volatility around and it's not exactly easy pickings for bargain hunters.''
In the banking sector, Commonwealth Bank shares were down 13 cents, or 0.47 per cent, at $27.67, NAB dropped 18 cents, or 0.9 per cent, to $19.82, ANZ gained 21 cents at $14.85 and Westpac fell 46 cents, or 2.66 per cent, at $16.85.
In resoucres, BHP Billiton had lost 4 cents to $29.88 while Rio Tinto was down $1.07, or 2.74 per cent, at $37.94.
The New York contract for light, sweet crude for delivery in January expired at $US33.87 a barrel on Friday, down $US2.35.
Among energy stocks, Woodside Petroleum was up 3per cent to $33.42, Santos lost 34 cents, or 2.38 per cent to $13.95 and Oil Search was down 14 cents, or 3.34 per cent, at $4.05.
At 12.15pm AEDT, the spot price of gold in Sydney was $US845.30 per fine ounce, down $US7.25 on Friday's close of $US852.55.
The gold stocks were weaker. Newcrest Mining was down $1.83, or 5.46 per cent, at $31.67, Newmont Mining rose 4 cents, or 0.73 per cent, to $5.55 and Lihir Gold fell 1 cent to $2.79.
In media stocks, Seven Network was up 17 cents at $6.66 and Ten shares lifted 3 cents, or 2.93 per cent, to $1.055.
Fairfax lost 2 cents to $1.53, News Corp was up 49 cents at $13.48.
Telstra sank 3 cents to $3.69 and its rival, Optus owner SingTel, was down 8 cents, or 3.04 per cent at $2.55.
On the Sydney Futures Exchange, the March share price index futures contract was down 36 points, or one per cent, at 3563 points on a volume of 6,901 contracts.
Markets are battered again
Shares open 2pc weaker as oil slumps
Miners drag shares lower at noon
