The Australian stock market opened one% lower after Wall Street continued its downward trend on mediocre economic news and higher bond yields.
At 1020 AEST, the benchmark S&P/ASX200 index fell one% to 5,061.5 points, while the broader All Ordinaries index lost 0.96% to 5,053.5 points.
CMC Markets analyst Tracey Warren said United States markets struggled to claw back last week's losses in quiet trade overnight, while Federal Reserve tapering expectations are also in focus.
"Fed Chairman speculation and mounting fear of another debt ceiling debate are drilling stock markets lower and sending bond yields higher," Ms Warren said.
Financials were mostly lower.
Commonwealth Bank fell 0.76% to $70.61, while ANZ Banking Group lost 0.82% to $29.20.
National Australia Bank dropped 0.73% to $31.13 after posting a slight lift in third-quarter profit and warning weak confidence continues to challenge business banking.
Westpac Banking Corporation fell 0.76% to $31.33.
Investment bank Macquarie Group lost 1.45% to $43.54.
In the insurance sector, QBE dropped 8.4% to $15.60 after posting a steep fall in first-half profit, Insurance Australia Group slid 1.02% to $5.81 and Suncorp fell 1.04% to $12.34.
Materials were mostly lower.
BHP Billiton lost 1.3% to $36.56, while Rio Tinto fell 1.56% to $59.20.
Fortescue Metals dropped 2.72% to $3.94.
Whitehaven Coal slipped 0.25% to $2.015 and Newcrest lost 2.61% to $12.32.
Arrium rose 5.58% to $1.04 after tipping significant earnings growth despite swinging to a heavy full-year loss.
In the energy sector, Santos slid 0.27% to $14.71, Oil Search gained 0.36% to $8.28 after reaffirming full-year production guidance and posting a slight lift in first-half profit and Woodside dropped 0.41% to $38.54.
The retail sector also fell.
Wesfarmers fell 3.22% to $39.68, while Woolworths lost 0.95% to $33.31.
Myer dropped 0.38% to $2.59 while rival David Jones fell 1.08% to $2.74.
Harvey Norman slipped 0.36% to $2.80 and JB Hi-Fi lost 0.91% to $18.43.
In media, Fairfax Media was flat at 55 cents, while 21st Century Fox dropped 1.06% to $34.59.
Ten Network fell 0.83% to 29.75 cents.
Southern Cross Media lost 0.74% to $1.6875, while Seven West dropped 1.67% to $2.36.
Meanwhile, Qantas was flat at $1.235, while Telstra dropped 0.2% to $4.90.
Macmahon Holdings slumped 17.14% to 14.5 cents after swinging to a full-year loss amid uncertain operating conditions.
Coca-Cola Amatil fell 4.24% to $12.20 after downgrading full-year earnings guidance and posting a fall in first-half profit.
Ansell rose 0.43% to $18.53 after posting a modest lift in full-year earnings and flagging growth in the year ahead.
Monadelphous dropped 3.61% to $18.15 after saying the surge in contracts that helped it increase full-year net profit is unlikely to continue.
In economic news on Tuesday, the Reserve Bank of Australia is due to release the minutes of its monthly board meeting.
The Australian Bureau of Statistics releases the international merchandise import figures for July, while the Commonwealth Bank business sales indicator for July is also due out.
In Australia, the market on Monday, the benchmark S&P/ASX200 index was 1.4 points, or 0.03%, lower at 5,112.5.
The broader All Ordinaries index was up 2.2 points, or 0.04%, at 5,102.3.