Australian stocks were more than one per cent lower mid-session, led by falls in resources and industrials stocks.
At 10.40am, the benchmark S&P/ASX200 index was down 46 points, or 1.15 per cent, at 4001.9 points, while the broader All Ordinaries index had fallen 1.12 points, or 1.14 per cent, to 4048 points.
On the ASX24, the September share price index futures contract was off 36 points at 3966 points, with 19,765 contracts traded.
Australian Stock Report head of research Geoff Saffer said almost every sector was weaker after global markets fell on talk that Greece could renegotiate the terms of its bail out.
"That's taken away some of the recent optimism," Mr Saffer said.
"Mining stocks were hit the hardest as well as industrials and energy stocks.
"But the defensive sectors like consumer discretionary and Telstra are okay."
US stocks rebounded Friday after Thursday's sharp fall, helped by European leaders meeting in Rome signalling a 130 billion euro ($163 billion) stimulus plan for the eurozone economy.
Wall Street closed higher - the Dow advanced 0.53 per cent, the S&P500 climbed 0.72 per cent and the NASDAQ gained 1.17 per cent.
Local mining stocks were all lower.
BHP Billiton shares were 1.9 per cent lower at $30.94 and Rio Tinto shares were down 1.4 per cent at $55.26.
In local news, more than a third of Billabong's share value has been wiped out as investors baulked at a $225 million capital raising and a big earnings downgrade.
Shares in Billabong plunged 36 per cent to 93 cents.
Fund manager Perpetual said it would aim to reduce costs by $50 million annually as part of a big restructure and flagged a steep fall in full-year profit.
The stock was up 37 cents to $23.71.Market turnover was 814 million securities worth $1.4 billion, with 249 stocks trading higher, 661 lower and 353 unchanged.
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