At 10.15am (AEST), the benchmark S&P/ASX200 was down 43.3 points, or 1.14 per cent, at 3770.6, while the broader All Ordinaries fell 42.9 points, or 1.13 per cent, to 3761.8.
The four major banks all were down in early trade.
Commonwealth Bank shed 17 cents to $35.43, ANZ fell 23 cents to $15.40, NAB lost 15 cents to $21.50 and Westpac was down 11 cents at $19.33.
Mining giant BHP Billiton lost 82 cents, or 2.38 per cent, to $33.58, while rival Rio Tinto plunged $2.84, or 4.26 per cent, to $63.80.
On Wall Street overnight , another bad signal from the job market and concern over a possible downgrade of British government debt sent stocks sharply lower.
The Dow fell 129.91, or 1.54 per cent, to 8,292.13, after earlier falling as much as 201 points. The Standard & Poor's 500 index fell 15.14, or 1.68 per cent, to 888.33, and the Nasdaq composite index fell 32.59, or 1.89 per cent, to 1695.25.
On the Sydney Futures Exchange, the June share price index contract was 64 points lower at 3773 on a volume of 6045 contracts.
