The Australian share market is a sea of red in early trade, amid profit taking by investors who took their cue from the overnight decline on Wall Street.

The S&P/ASX200 benchmark index was lower by 56.6 points, or 0.84 per cent, to 6643.7 at 1200 AEDT on Wednesday. The index fell as low as 6630 earlier in the session.

The All Ordinaries was down 59.1 points, or 0.85 per cent, to 6903.0.

The local market trend was dictated by the overnight fall on Wall Street where all three major US indices ended lower as doubts crept about the expansion of the pandemic support by the government.

Investors preferred to cash in on profits amid light trading volumes in a holiday-shortened trading week.

Other Asian markets also paused their upward climb, reversing direction.

Local sentiment was hit further by a rebound in coronavirus cases in the NSW.

The state reported 18 cases of community transmission of coronavirus, and a second cluster of the deadly disease in Sydney’s inner west, prompting stricter New Years Eve restrictions for Sydney.

In the local market, every sector was trading in the red, with much of the damage sustained by the financial and industrial sectors.

Each of the big four banks were trading around 0.8 per cent lower.

Industrial stocks, which had posted smart gains in the previous session, reversed direction, with CIMIC Ltd, toll road operator Transurban and Sydney Airport all trading around 1.0 per cent lower.

Major mining stocks such as BHP, Rio Tinto and Fortescue Metals were all down between 0.5 to 1.0 per cent, while gold stocks also slipped lower.

Among energy stocks, Santos, Woodside Petroleum and Origin Energy were each trading between .5 and 1.0 per cent lower, despite a rebound in oil prices overnight.

A2 Milk shares were down 1.5 per cent after a two-day rally, while Afterpay shares gave much away most of the previous session’s gains, down more than 3 per cent.

Meanwhile, the Aussie dollar continued to strengthen amid weakness in the US dollar. It was buying 76.17 US cents at 1200 AEDT, up from 75.95 US cents at Tuesday’s close.