Aust stocks drop at open

Local market retreats in early trade as uncertainty over ongoing budget negotiations in the US weighs on sentiment.

The Australian stock market opened almost 1% as uncertainty over the ongoing budget negotiations in the United States weighed on investor sentiment.

At the 1015 AEST official market open, the benchmark S&P/ASX200 index fell 0.9% to 5,259.5 points, the broader All Ordinaries index retreated 0.87% to 5,256.4.

IG markets analyst Evan Lucas he expected the market to react strongly to the ongoing situation in the United States.

"With the government shutdown looming, and over 800,000 non-essential staff being possibly laid off tomorrow, the markets will respond violently to this news," Mr Lucas said.

In economic news on Monday, the Reserve Bank of Australia is due to release financial aggregates for July while the TD Securities-Melbourne Institute inflation gauge for September is due out.

In equities news, NAB is expected to release online retail sales index for August.

In Australia, the market on Friday hit another fresh five year high as previously underperforming stocks helped push the market to its seventh consecutive week of gains.

The benchmark S&P/ASX200 index was added 12.6 points, or 0.24%, to 5,307.1.

The broader All Ordinaries index gained 14.1 points, or 0.27%, to 5,302.3.

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