At 12.05pm (AEST), the benchmark S&P/ASX200 was down 0.8 point, or 0.02 per cent, at 3,994.8, while the broader All Ordinaries had lost 1.3 points, or 0.03 per cent, at 3986.6 points.
Bell Potter senior adviser Stuart Smith said he was not surprised the market had moved into negative territory after closing higher for three consecutive days.
"We've got to run out of puff a little bit after what has really been an overshoot,'' Mr Smith said.
"We're not out of the woods yet, I don't think.
"There is no need for despair; it's just where we ought to be.''
The major miners were mixed, with Rio Tinto down 40 cents at $52.00 and rival BHP Billiton up 7 cents at $34.98.
The banks were flat.
Commonwealth Bank gained 4 cents to $39.45, ANZ lifted 14 cents to $16.79 and Westpac added 3 cents to $20.21, while NAB was off 19 cents at $23.76.
In the US overnight, Wall Street trading was cautious for most of the day amid fears for major lender CIT after the Government refused further aid.
In New York, The Dow Jones Industrial Average rose 95.61 points, or 1.11 per cent, to 8711.82.
On the Sydney Futures Exchange, the September share price index contract was 10 points lower at 3965 on 12,446 contracts.
Shares close in positive territory
