The Australian share market has opened lower after comments the US Federal Reserve overnight suggested stimulus activity there may soon be eased.
Wall Street stocks retreated after Fed chairman Ben Bernanke told Congress the US central bank could pull back on its aggressive stimulus measures, known as quantitative easing (QE) if economic conditions continued to improve.
IG market strategist Stan Shamu said he thought the market had over-reacted, as Dr Bernanke's comments were not new. He said he did not expect any rash action that would damage the economy.
"I don't think they will want to risk pulling off quantitative easing if it caused the economy to stall, so I think there is a long way to run yet," he told AAP.
Locally, mining stocks were weaker as expected, with riskier and cyclical stocks affected by negative sentiment.
BHP Billiton was nine cents down at $35.18, while Rio Tinto had shed 15 cents to $56.15.
The market's largest goldminer Newcrest Mining was harder hit, following heavy falls in the gold price overnight.
It was 46 cents, or 3.1 per cent, down at $14.41.
Stocks that trade in US dollars benefited from an overnight rise in the greenback which translates to better earnings for them.
One example was News Corporation shares, which jumped 82 cents, or 2.42 per cent, to $34.72.
Mr Shamu said the concurrent fall in the value of the Australian dollar to below 97 US cents was probably preventing the market falling further with many Australian industries helped by a weaker currency.
However, it could fall further ahead of the release of key Chinese manufacturing figures on Thursday which, he said, would also move the Australian market.
* At 1034 AEST, the benchmark S&P/ASX200 index was down 44.5 points, or 0.86 per cent, at 5,120.9 points.
* The broader All Ordinaries index was down 43.6 points, or 0.85 per cent, at 5,098.5 points.
* The June share price index futures contract was 46 points at 5,125 points, on volume of 12,961 contracts.
* National turnover was 334.4 million securities worth $761.2 million.