Shares have slipped further after the first two hours of trading on the Australian market, amid worries about rising virus cases in Victoria and overseas and following a drop in US markets.
The S&P/ASX200 benchmark index was lower by 27.3 points, or 0.45 per cent, at 5985.6 points at 1200 AEST on Wednesday.
At 1200 AEST, the All Ordinaries index was 28.4 points, or 0.46 per cent lower, at 6098.3.
Overnight, the Dow, S&P 500 and Nasdaq all ended lower after large parts of the US reported tens of thousands of new coronavirus infections.
Strategists said investors may also be taking profits after the recent rally.
The Dow Jones Industrial Average fell 1.51 per cent, the S&P 500 lost 1.08 per cent and the Nasdaq Composite dropped 0.86 per cent.
“Surging infection rates in Brazil, Texas, Florida and Australia’s second most populous state, Victoria, highlight the economic risks,” CMC Markets chief market strategist Michael McCarthy said.
“Already historic levels of fiscal and monetary support from governments and central banks mean the ability to enact further measures is limited.”
In Melbourne, five million people are preparing to re-enter lockdown for six weeks, which has also meant the closure of businesses such as cinemas and hotels.
In the local market, financials were down 0.9 per cent, after major banks agreed to extend a six-month repayment holiday for home loan customers facing the economic impact of the coronavirus pandemic.
ANZ, NAB and Westpac were all down by more than 1.0 per cent, while the Commonwealth Bank edged lower by 0.08 per cent.
The energy sector fared worse, down 1.07 per cent.
Oil Search lost 2.86 per cent to $3.06 and Beach Energy fell 2.36 per cent to $1.44.
Gold miners fared better. Prices of the safe haven metal were within striking distance of $US1,800 ($A2,594) per ounce.
Northern Star jumped 5.52 per cent to $14.71 after reinstating dividends and reporting full-year sales and gold production had come in near the lower end of its earlier guidance despite the coronavirus uncertainty.
Rival Evolution Mining climbed 2.42 per cent to $6.12.
Other big miners were not faring as well. BHP rose 0.43 per cent to $36.25, Rio gained 0.29 per cent to $96.57 and Fortescue was lower by 0.84 per cent to $14.67.
Afterpay shares have resumed trading after institutional investors bought $650 million worth of stock in an equity raising. The sought-after shares were trading at $66.52 per share, down 2.18 per cent, but still higher than the $66 price in the institutional placement.
Payments provider Splitit surged 14.29 per cent to $1.56 after reporting record growth in the second quarter.
Its merchant sales grew to $US65.4 million, up 260 per cent on the same quarter last year.
The Australian dollar was buying 69.37 US cents at 1200 AEST, down from 69.52 US cents at the close of trade on Tuesday.