The Australian stock market opened lower following Wall Street falls as better than expected United States jobless claims figures stoked fears of early Federal Reserve stimulus tapering.
At 1020 AEST, the benchmark S&P/ASX200 index fell 0.86% to 5,108.1 points, while the broader All Ordinaries index dropped 0.81% to 5,095.2 points.
IG analyst Evan Lucas said investors will be watching the US markets over the next month.
"Taper talk is only going to get louder and louder, to a point of deafening," Mr Lucas said.
"The next 30 days heading to the September [Federal Reserve] meeting will be volatile.
"Markets will certainly try to do whatever they can to hold on to the monetary stimulus."
Financials were mostly lower.
Commonwealth Bank fell 0.79% to $73.18, while ANZ Banking Group lost 3.59% to $29.27 after unveiling a slight lift in nine-month cash profit.
National Australia Bank dropped 0.92% to $31.19 and Westpac Banking Corporation shed 1.3% to $31.19.
Investment bank Macquarie Group fell 1.69% to $44.18.
In the insurance sector, QBE dropped 0.56% to $16.985, Insurance Australia Group lost 0.68% to $5.81 and Suncorp dropped 0.72% to $12.35.
Materials mostly fell, with the major miners in the red.
BHP Billiton shed 0.72% to $37.06, while Rio Tinto fell 1.07% to $60.74.
Fortescue Metals dropped 2.14% to $4.11.
Whitehaven Coal slipped 0.25% to $2.025 and Newcrest put on 3.06% to $12.46.
In the energy sector, Santos edged down 0.07% to $14.00 after increasing first-half net profit on growth in sales revenues, Oil Search gained 0.37% to $8.13 and Woodside rose 0.51% to $38.505.
The retail sector was mostly lower.
Wesfarmers lost 3.27% to $39.91, while Woolworths fell 0.54% to $33.09.
Myer retreated 0.57% to $2.595 while rival David Jones declined 1.79% to $2.75.
Harvey Norman dropped 1.05% to $2.82 and JB Hi-Fi added 0.11% to $18.87.
In media, Fairfax Media was flat at 54.5 cents, while 21st Century Fox lost 0.62% to $35.03.
Ten Network slipped 0.86% to 28.75 cents.
Southern Cross Media was flat at $1.655, while Seven West fell 1.02% to $2.435.
Meanwhile, Qantas lost 1.6% to $1.23, while Telstra fell 0.29% to $5.085.
Duet Group fell 0.47% to $2.12 as it posted a steep decline in full-year profit but expressed confidence in a solid 2014.
In economic news, Reserve Bank of Australia assistant governor (Financial Markets) Guy Debelle is scheduled to speak on The Impact of Payments System and Prudential Reforms on the RBA's Provision of Liquidity, at an Australian Financial Markets Association (AFMA) and RBA briefing.
The RBA's Payments System board meeting is also scheduled.
In Australia, the market yesterday edged lower due to mixed reactions to corporate earnings reports.
The benchmark S&P/ASX200 index dropped 5.0 points, or 0.1%, to 5,152.4.
The broader All Ordinaries index lost 4.3 points, or 0.08%, to 5,136.7.