Aust stocks fall further at noon

Local market widens morning losses as US budget uncertainty weighs.

The Australian stock market widened morning losses at noon as uncertainty over the ongoing budget negotiations in the United States weighed on investor sentiment.

At 1205 AEST, the benchmark S&P/ASX200 index fell 1.35% to 5,235.6 points, the broader All Ordinaries index retreated 1.3% to 5,233.2 points.

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, the Reserve Bank of Australia released financial aggregates for July while the TD Securities-Melbourne Institute inflation gauge for September was unveiled.

Materials were lower, with the major miners each more than one% in the red.

BHP Billiton retreated 1.42% to $35.845, while rival Rio Tinto fell 2.26% to $61.86.

Fortescue Metals declined 2.83% to $4.80, Whitehaven Coal slipped 2.48% to $1.97 and Newcrest added 2.01% to $11.70.

In the energy sector, Santos retreated 2.68% to $15.24, Oil Search lost 2.6% to $8.63 and Woodside fell 0.64% to $38.58.

Financials were mostly lower, with the big four banks all in the red.

ANZ Banking Group lost 1.63% to $31.005, while Commonwealth Bank retreated 1.63%% to $71.97.

National Australia Bank fell 1.57% to $34.56 and Westpac Banking Group lost 1.5% to $32.80.

Investment bank Macquarie Group fell 1.64% to $48.10.

In the insurance sector, QBE fell 1.43% to $14.51, Insurance Australia Group lost 1.35% to $5.86 and Suncorp shed 1.65% to $13.11.

The retail sector was mostly lower.

Wesfarmers retreated 1.32% to $41.15, while Woolworths lost 1.04% to $35.16.

Myer fell 2.43% to $2.605 and rival David Jones declined 1.85% to $2.915.

Harvey Norman fell 0.93% to $3.21 while JB Hi-Fi lost 1.96% to $20.97.

In media, Fairfax Media fell 0.46% to 54.25 cents, 21st Century Fox lost 0.2% to $35.30 and News Corp fell 0.56% to $17.65.

Ten Network slipped 2.54% to 28.75 cents and Southern Cross Media retreated 2.6% to $1.7825, while Seven West fell 2.63% to $2.405.

Blue chip Qantas fell 1.82% to $1.4825, while Telstra retreated 0.6% to $4.99.