UPDATE 8am: The Australian sharemarket is more than three-quarters of a per cent lower after Wall Street plunged overnight.
At 8am, the benchmark S&P/ASX200 index was down 31.6 points, or 0.7 per cent, at 4356.8, while the broader All Ordinaries index was down 33.5 points, or 0.8 per cent, at 4377.2.
On the ASX 24, the December share price index futures contract was down 38 points at 4,362, with 9,847 contracts traded.
IG Markets analyst Cameron Peacock said the Australian market had followed Wall Street's lead.
The Dow Jones Average plunged to close at 184.92 after US President Barack Obama challenged Republicans to accept tax increases for the wealthy in a deal to avert the so-called year-end fiscal cliff.
The “fiscal cliff” refers to the huge tax hikes and spending cuts that automatically come into force on January 1, and are expected to send the world's largest economy back into recession, if US Republicans and Democrats can't reach a compromise.
“What happens there happens here these days,” Mr Peacock said.
Europe's main stock markets also dropped with workers across indebted eurozone nations striking in protest against their governments' deep austerity programs.
London's FTSE 100 index of leading companies dropped 1.11 per cent in overnight trade to 5722.01 points, while in Frankfurt the DAX 30 gave up 0.94 per cent to 7,101.92 points and Paris' CAC 40 fell 0.89 per cent to 3400.02 points.
Locally, the mining giants all opened lower.
BHP Billiton dived 50 cents to $33.23, Rio Tinto plunged $1.13 to $56.72 and Fortescue dropped six cents to $3.94.
The four major banks also experienced falls on open.
ANZ plummeted 29 cents to $23.91, National Australia Bank fell 10 cents to $23.14, Westpac lost 23 cents to $24.62 and Commonwealth Bank was 37 cents lower at $58.72.
Meanwhile, Qantas gained 6.5 cents to $1.295 after the airline announced it would spend $100 million to buy back about four per cent of its issued stocks and would repay $650 million of debt ahead of its due date.National turnover was 291 stocks worth $848 million, with 127 up, 436 down and 262 unchanged.