The sharemarket lost ground as investors waited for an update on economic stimulus measures in the United States.
The benchmark S&P/ASX 200 Index was down 11.5 points, or 0.24 per cent, at 4814.4. The broader All Ordinaries Index was down 10.4 points, or 0.22 per cent, at 4794.6.
The market fell nearly 1 per cent during the day, in line with falls on Asian markets and after the minutes from the latest Reserve Bank board meeting provided little guidance.
But data showing strong rises in Chinese property prices helped the market recover some of its losses during afternoon trade.
IG strategist Chris Weston said investors were sensitive before the US Federal Reserve's policy board meeting being held on Wednesday.
US Fed chairman Ben Bernanke is tipped to provide direction on whether policymakers will continue with a monthly $US85 billion bond-buying program, known as quantitative easing.
Bond futures prices were slightly higher with a small rally after the release of the RBA minutes.
The RBA kept the cash rate unchanged at a record low of 2.75 per cent two weeks ago but the minutes of the policy meeting showed that it was still inclined to reduce the rate if inflation stayed low and growth in the non-mining sectors of the economy became sluggish.
"The RBA obviously kept the view there was scope to ease rates should that prove necessary," Westpac interest rate strategist Tim Jung said. "We don't think there is a whole lot in there for the market to change its expectation of what the RBA will deliver."
The September 10-year bond futures contract was trading at 96.600 (implying a yield of 3.400 per cent) after peaking at 96.640, up from 96.595 (3.405 per cent) on Monday. The three-year contract was at 97.440 (2.560 per cent), up from 97.435 (2.565 per cent).
Recent economic data has shown signs that the US economic recovery is getting more solid, raising the possibility that the Fed would start to wind back its quantitative easing, Mr Jung said.
"The obvious thing to look for is the tapering of their QE program," he said.
"Any indication of the size and also the timing of the tapering will be crucial to near-term price action."