Aust stocks open sharply lower

The Australian stock market resumed trading after the Australia Day long weekend almost 1.5% lower following broadly weaker leads on Wall Street overnight.

At the 1015 AEDT official market open, the benchmark S&P/ASX200 index dropped 1.47% to 5,163.9 points, while the All Ordinaries index shed 1.44% to 5,178.9 points.

All sectors of the local market showed weakness at the start of trading, Morgans senior private client adviser Bill Chatterton said.

"It's going to be across the board, you don't have a move in the Dow like that without having a response across our market," he said.

In economic news, National Australia Bank releases its monthly business survey for December.

The market was closed on Monday for the Australia Day public holiday, and on Friday the benchmark S&P/ASX200 index dropped 22.1 points to 5,240.9, while the All Ordinaries index shed 21.2 points to 5,254.3.

United States stocks Failed to find any momentum despite rebounding slightly at the open following Friday's two% rout. A fall in new home sales data forced markets to turn lower in morning trade before an afternoon recovery saw stocks recover some lost ground.

The 7% drop in new home sales was much worse than analysts had forecast.

At the closing bell, the Dow Jones Industrial Average was down 41.23 points, or 0.26%, at 15,837.88.

Meanwhile, markets in Europe were led lower by London's FTSE, which lost close to 2% in part due to the quashing of rumours that US telco AT&T would buy Vodafone Group and also on a soft update from oil & gas giant BG Group. Investor sentiment was also strained by news that the Royal Bank of Scotland had put aside another £3.1 billion ($A5.7 billion) relating to claims stemming from the financial crisis.

Other markets in the region were not as harshly dealt with, though none of the major indices registered gains.

A rare bright spot was seen in Germany, where business confidence rose above forecasts and the country's central bank indicated it was confident of strong growth in the first quarter.