At 16:15 (AEST) the benchmark S&P/ASX200 index was down 12 points, or 0.31 per cent, at 3892.1 points, while the broader All Ordinaries index gave up 16.8 points, or 0.43 per cent, to 3887.4 points.
On the Sydney Futures Exchange, the June share price index contract, which rolled over at noon, was 25 points higher at 3922 on a volume of 10,403 contracts.
The September share price index contract had lost 14 points to 3,856 on a volume of 28,651 contracts.
Shaw Stockbroking senior dealer Jamie Spiteri said volumes were excessively high and driven by the expiry of the June share price index contract.
"A lot of the volumes are inflated by the heavy trading related to index futures expiry today."
Trading in Rio Tinto ex-dividend and other resources stocks was weighed heavily on the market.
"The big mark down in the Rio share price today - going ex dividend yesterday they were relatively resilient but not so here today," Mr Spiteri said.
Rio dropped $5.16, or 8.95 per cent, to $52.52 and was the second highest traded stock by volume, with 9.4 million shares changing hands for $501 million.
Rio's fall combined with weaker commodity prices in offshore markets overnight dragged the rest of the resources sector down.
BHP Billiton was down 96 cents at $34.70.
"Other major mining groups were noticeably weaker across Europe and North America last night," Mr Spiteri said.
Santos was the resource sectors bright spot, firming 51 cents, or 3.59 per cent, to $14.70 after signing the first supply agreement for its proposed Gladstone liquefied natural gas (GLNG) project with Malaysia's Petronas.
GPT was the top traded stock by volume, with 73.89 million securities traded for $36.76 million.
Banks and defensive stocks were relatively steady, buffering the market from the full brunt of declines in the resources sector, Mr Spiteri said.
By 16:23 AEST Commonwealth Bank was up 37 cents at $38.07, NAB added 32 cents at $22.05 and Westpac had climbed 31 cents at $19.91.
ANZ lost 10 cents to $16.35.
Among defensive stocks Wesfarmers was stronger, up 40 cents at $21.87 and Woolworths gained 12 cents to $25.62.
Telstra finished down four cents at $3.32.
Major gold stocks were mixed as the spot price of gold in Sydney traded at $US939.40 per fine ounce at 16:27 AEST, up $US1.45 on Wednesday's close of $US937.95.
Dual-listed Newmont Mining gained three cents at $5.25, Newcrest Mining lost 36 cents to $30.72 and Lihir Gold eased three cents to $2.86.
