The Australian sharemarket is expected to open about one per cent lower tomorrow following falls in Europe and the US on Friday.
Markets plunged in the US, with the Nasdaq pulled down by more than two per cent by a tech stock rout led by Apple and Microsoft as a raft of disappointing earnings and trimmed forecasts spooked investors.
AMP Capital chief economist Shane Oliver said Australian stocks were likely to be weaker following the disappointing US results and investor worries about a lack of progress at the European leaders' summit, particularly regarding Spain.
"Consequently the US sharemarket had a fairly steep fall and our futures have traded down with that," Dr Oliver said.
"It looks like we're going to have a fairly soft start to trade on Monday.
"I'd say we're probably going to be off about one per cent."
The Australian futures market is pointing to a 0.99 per cent fall at the open.
In economic news, RBA assistant governor Guy Debelle is to deliver a speech to the Australian Securitisation Forum on Monday.
Market watchers are also awaiting the release on Wednesday of inflation figures for the September quarter.
The figures are expected to show an increase in the annual inflation rate, adding impetus to the case for another interest rate cut in November.
The local annual general meeting season is also getting under way.
Dr Oliver said there was some talk that the federal government would release its mid-year economic and forecasting outlook, which will contain an update on the budget for this year.
"There's a risk that could entail further tightening measures because the budget is running well behind the surplus," he said.
At the closing bell on Friday, the Dow Jones Industrial Average was down 187.92 points (1.39 per cent) at 13,361.02.
The broad-based S&P 500 lost 24.17 (1.66 per cent) at 1433.17, and the Nasdaq Composite was off 67.25 points (2.19 per cent) at 3005.62.At the close of trade in Australia on Friday, the benchmark S&P/ASX200 index was up 11.7 points, or 0.26 per cent, at 4571.1, while the broader All Ordinaries index had gained 12.6 points, or 0.28 per cent, to 4593.5.