At 12.00pm (AEST), the benchmark S&P/ASX200 was down 7.4 points, or 0.17 per cent, at 4381, while the broader All Ordinaries had dropped 12.9 points, or 0.29 per cent, to 4385.2.
CMC Markets head of trading, James Foulsham, said the local market was down but the falls were not as steep as in the US overnight.
"We saw a big sell off in the US overnight and the market here has held up pretty well,'' Mr Foulsham said.
"A lot of it was priced into the local market before we closed on Monday.
"People certainly aren't panicking. There was some selling this morning and there was also some buying.''
Mr Foulsham said the local mining sector was weighing on the market.
"BHP Billiton and Rio Tinto are a bit weaker and the banks are pretty mixed,'' he said.
"It's mostly the mining sector that is weighing on the market.''
BHP Billiton was 4 cents lower at $37.09, while Rio Tinto was down 10 cents at $57.00.
Financials were also lower.
NAB fell 1 cent to $27.07 after announcing it would pay $285 million to buy Challenger Financial Services Group's mortgage management business.
Energy stocks were mixed.
Woodside Petroleum was 33 cents lower at $43.19, but Oil Search had risen 2 cents to $5.64.
Santos was 29 cents higher at $14.79, after announcing, with liquefied natural gas (LNG) company GDF SUEZ, a partnership to develop a floating LNG project in the Bonaparte Basin.
At 12.22pm, the spot price of gold in Sydney was $US938.60 per fine ounce, down $US5.15 on yesterday's close of $US943.75.
The media sector was mixed, with News Corporation (the parent company of the publisher of news.com.au) up 4 cents at $15.24, its non-voting scrip down 7 cents at $13.03, Seven Network up 15 cents at $6.64, and Fairfax off 1cent at $1.455.
On Wall Street, crude oil futures for September delivery fell 76 US cents to settle at $US66.75 a barrel on the New York Mercantile Exchange.
On the Sydney Futures Exchange, the September share price index contract was 12 points lower at 4350 on 18,502 contracts.
Experts point out where good buys might beResources push shares lower at noon
