At 10.15am (AEST), the benchmark S&P/ASX200 was 55.9 points lower, or 1.39 per cent, at 3975.8, while the broader All Ordinaries was down 58.9 points, or 1.46 per cent, to 3971.5 points.
On the Sydney Futures Exchange, the June share price index contract was 55 points lower at 3976 on a volume of 45,440 contracts.
Mining giant BHP Billiton was down 73 cents, or 1.97 per cent, at $36.27, while Rio Tinto plunged $3.50, or 4.64 per cent, to $72.00.
The major banks all were weaker at 10.15am (AEST).
Commonwealth Bank had dropped 34 cents to $37.87, ANZ lost 20 cents to $17.10, NAB was down 27 cents to $21.92, while Westpac dropped 14 cents to $19.73.
Wall Street stocks dived amid recovery worries fueled by comments from the Group of Eight finance ministers, and profit-taking led by a commodities sell-off.
The Dow Jones Industrial Average tumbled 187.13 points, or 2.13 per cent, to 8612.13.
The tech-rich Nasdaq fell 42.42 points, or 2.28 per cent, to 1816.38 and the broad-market Standard & Poor's 500 index lost 22.49 points, or 2.38 per cent, to a close of 923.72.
Burrell Stockbroking adviser Daniel Manley said it would be a day of profit-taking, particularly among sectors that had seen recovery of late.
"There's a lot of profit-taking where there has been a big bounce, among iron ore miners and the resources in particular," Mr Manley told AAP.
"It was a pretty ugly night on Wall Street all `round, and we saw some lower commodity prices.
"The banks are holding reasonably well. The majority of the weakness lies in the resources sector."
Amongst iron ore stocks, Mount Gibson Iron plunged 5.5 cents, or 5.07 per cent, to $1.03, Fortescue Metals slid 17 cents, or 4.42 per cent, to $3.68, while Sims Metal Management fell 54 cents, or 2.15 per cent, to $24.53.
In news today, Nufarm says its net operating profit for the current financial year is likely to fall 15 per cent lower than previously forecast.
Its shares plummeted $1.10, or 9.09 per cent, to $11.00.
Lihir Gold is likely to produce between 1.04 million and 1.2 million ounces of the precious metal in 2009.
Its shares were down five cents at $2.87, while rival Newcrest dropped 58 cents to $30.98 and Newmont lost five cents to $5.20.
At 10.32am (AEST), the spot price of gold was $US928.95 per fine ounce, down $US4.05 on Monday's close of $US933.00.
