At 12pm (AEDT), the benchmark S&P/ASX200 had fell 45.5 points, or 1.24 per cent, at 3,626.8, while the broader All Ordinaries dropped 40 points, or 1.11 per cent, to 3,574.9.
On the Sydney Futures Exchange, the June share price index contract was trading down 42 points at 3635 on volume of 8474 contracts.
"The market is down as expect after an ordinary lead from the US on Friday and lower commodity prices," CMC Markets analyst David Taylor said.
"But I don't expect the market to be lower than this with the market getting a little support from Westpac and Rio."
Commonwealth Bank of Australia (CBA) says its wholly owned bank subsidiary Bankwest will cut 400 jobs from its workforce due to the economic downturn. CBA sank 37 cents to $34.63.
Among the other major banks, NAB decreased 15 cents to $20.94, ANZ lost 23 cents to $16.32 but Westpac rose 21 cents to $19.35.
BHP Billiton, which makes up about 12 per cent of the All Ordinaries index, fell $1.03, or 3.03 per cent, to $32.98.
However, rival Rio Tinto gained 71 cents, or 1.25 per cent, to $57.59.
In the US on Friday, the Dow fell 148.38 points, or 1.9 per cent, to 7776.18, while the broader Standard & Poor's 500 index fell 16.92 points, or 2.03 per cent, to 815.94.
The Nasdaq composite index dropped 41.8 points, or 2.63 per cent, to 1,545.2.
Making headlines this Monday, Chinese state-owned Minmetals Non-ferrous Metals Company says it remains in talks with Australian regulators about a revised takeover offer for debt-laded miner OZ Minerals.
OZ Minerals has been suspended from trading and had last traded at 55.5 cents.
Among energy stocks, Santos had fell 55 cents, or 3.15 per cent to $16.92, Woodside sank $1.37, or 3.34 per cent, to $39.63 and Oil Search lost 13 cents to $5.44.
Telstra was down one cent to $3.24, while rival Optus's parent Singapore Telecommunications was up one cent to $2.47.
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