The Australian share market was a third of a per cent lower at noon following lacklustre morning trade as investors prepare for an interest rate cut next week.
The morning losses came despite gains on Wall Street and positive leads from European markets.
At 1200 AEST on Monday, the benchmark S&P/ASX200 index was down 14.9 points, or 0.34 per cent, at 4,351.6 points, while the broader All Ordinaries index had fallen 14.6 points, or 0.33 per cent, at 4,429.6 points.
On the ASX 24, the June share price index futures contract was 15 points lower at 4,353 points, with 10,376 contracts traded.
Australian Stock Report head of research Geoff Saffer said most sectors of the market were performing poorly, while the defensive sector, including Telcos and utilities, was in positive territory.
On Tuesday the Australian Bureau of Statistics (ABS) will release the consumer price index (CPI) as investors price in a 92 per cent chance of a May rate cut.
"A rate cut is extremely likely at this stage unless CPI really surprises on the down side tomorrow, which doesn't look likely now," Mr Saffer said.
"Most of the recent economic data has been soft or reasonably weak, so most sectors are hoping for a rate cut to reinvigorate the market."
Wall Street shares closed higher on Friday, buoyed by better than expected US earnings, solid German business confidence data and a $430 billion deal to fight Europe's debt crisis.
The Dow Jones Industrial Average climbed 65.16 points or 0.5 per cent to 13,029.26 by the close of trade.
European stock markets and the euro were firmer after solid business confidence data from Germany and as investors looked ahead to a key IMF meeting and weekend French elections.
No major equities news is expected.
In economics news Australia's producer price index at the final stage of production fell 0.3 per cent in the March quarter, for an annual rise of 1.4 per cent.
Resources stocks were mixed on Monday.
BHP Billiton was down 17 cents to $35.33, while Rio Tinto was up 1.5 cents to $66.64 and Fortescue Metals was down five cents to $5.93.
The four major banks were also mixed.
The Commonwealth Bank was up three cents to $50.97, ANZ was up one cent to $23.46 and Westpac was up two cents to $22.12.
However, National Australia Bank was down 20 cents to $24.99.
National turnover was 661 million securities worth $1.05 billion, with 378 stocks up, 429 stocks down and 366 unchanged.