At 10.24am (AEDT) the benchmark S&P/ASX200 index fell 57.8 points or 1.61 per cent to 3540.2, while the broader All Ordinaries index was down 51 points or 1.44 per cent at 3483.2.
Companies that make most of their profit in the US were all down.
Westfield declined 31 cents to $13.74.
News Corporation (the parent company of the publisher of news.com.au) shed 5.2 per cent to $12.60 while building materials maker James Hardie dropped 7.2 per cent to $3.88.
Sydney Reynolds Stockbroking director Markus Mueller said the weak lead from the US had weighed on local stocks, while also pointing out that the capital raisings by different companies had caused share prices to fall.
"Capital raising has become a key feature of the market and that sucks money away,'' Mr Mueller said.
He pointed to Bluescope, which raised $300 million through an institutional placement, and some of the property companies which were having to recapitalise.
Bluescope fell 6.4 per cent to $2.79.
Realestate fund GPT Group lost 4.5 per cent to $85.50 and developer Mirvac Group dropped 3.3 per cent to $1.165.
Mr Mueller said volatility was settling down in the market while volumes were also getting smaller as Christmas approached.
The miners were also down at the open, after a report from China showed imports fell at Australia's second biggest goods destination after Japan.
BHP Billiton fell 63 cents to $29.57, while rival miner Rio Tinto declined 80 cents to $39.20.
Fortescue Metals lost 2.9 per cent to $2.64.
Gold and energy stocks benefited from the gain in the price of the precious metal and oil.
The price of gold in Sydney was $US820.80 per fine ounce up $US7.05 on Thursday's close of $US813.75.
Lihir Gold gained 4.3 per cent to $2.45 and Newcrest mining added 59 cents to $27.90.
Oil prices rose nearly 12 per cent on Thursday, with light, sweet crude for January delivery gaining $US4.46 to settle at $US47.98 a barrel in New York.
Woodside Petroleum rose $1.01 to $33.78, Santos gained 22 cents to $15.02 and Energy Resources added 70 cents to $18.14.
On the Sydney Futures Exchange the December share price index contract was 36 points lower at 3551 on a volume of 7265 contracts.
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