THE Australian share market lost more ground during intra-day trading, with mining stocks falling on a negative outlook for iron ore prices.
The major indices opened around one per cent lower and by midday had marked deeper losses.
The benchmark S&P/ASX200 index was down 59.2 points, or 1.4 per cent, at 4154.5 and the broader All Ordinaries index had lost 56.4 points, or 1.32 per cent, to 4218.4.
The December share price index futures contract was down 62 points at 4156, with 18,995 contracts traded.
John Milroy, investment adviser at Macquarie Private Wealth, said investors' negative sentiment was driven by the potential impact of lower iron ore prices on Australia's miners, despite solid quarterly production reports earlier this week from BHP Billiton and Rio Tinto.
"The market is just running away," he said.
"Rio was $70 on Monday and $63 and a bit today and that tells the tale."
Rio Tinto was trading down $1.90, or 2.92 per cent, to $63.18, while BHP Billiton had fallen 80 cents, or 2.2 per cent, to $35.60.
Earlier this week reports emerged that China's steel makers were demanding lower iron ore prices and Brazilian mining giant Vale had accepted price cuts.
Woodside Petroleum dropped $1.22, or 3.48 per cent, to $33.84 after The Australian newspaper reported the company's efforts to raise equity could be complicated by a delay in Royal Dutch Shell's sale of its $7 billion stake, Mr Milroy said.
Jittery investors are also treading water ahead of a European leaders summit on October 23 to discuss the continent's debt crisis, he said.
"Markets are still really whippy."
"There's an expectation you'll get a really good picture of what the agreement will look like when the full G20 (Group of 20 nations) meet on November 3 and 4 and markets are really sweating on that."
Gold major Newcrest Mining slumped $1.87, or 5.23 per cent, to $33.88 after reporting a 16 per cent drop in gold production for the September quarter, higher cash costs and operational shut-downs at Lihir Island and in Indonesia.
"They've disappointed once again. Cash costs are near enough to $600 an ounce versus our forecast of $545," Mr Milroy said.
The spot price of gold in Sydney was trading at $US1,629.70 per fine ounce, down $US30.17 from yesterday's closing price of $US1659.87.
Banks and financials also sold off, with Westpac leading the big four banks lower after losing 45 cents, or 2.06 per cent, to $21.40.
Challenger shares firmed three cents to $4.49 after the company said it sold a record $509 million of retail annuities in the first quarter, putting the company on track to meet its target of a 25 per cent increase in retail annuity sales for the year.
In other news today, packaging maker Amcor said it remains confident of achieving earnings growth in the current financial year after its first quarter performance met expectations.
Amcor's stock rose 13 cents, or 1.88 per cent, to $7.06.
National turnover was 717 million shares, worth $2.15 billion, with about five stocks falling for every one that rose.
