The Australian stock market opened almost two per cent lower following an overnight fall in US markets.

At 7.15am, the benchmark S&P/ASX200 index was down 55.8 points, or 1.77 per cent, at 4693.4, while the broader All Ordinaries fell 53.6 points, or 1.12 per cent, to 4714.2.

On the Sydney Futures Exchange, the December share price index contract was down 56 points at 4702 on volume of 5171 contracts. The big miners both were down more than 1.5 per cent at open.

BHP Billiton fell 70 cents, or 1.71 per cent to $40.15, and Rio Tinto was down $1.45, or two per cent, at $71.15.

A stronger US dollar and more discouraging signs of a subdued economic recovery triggered a broad sell-off in stocks on Wall Street overnight.

Major indices tumbled more than one per cent.

The Dow fell 93.87, or 0.90 per cent, to 10,332.44.

The Standard & Poor's 500 index lost 14.9, or 1.34 per cent, to 1094.9, while the Nasdaq composite index declined 36.32, or 1.66 per cent, to 2156.82.

Austock Securities senior client adviser Michael Heffernan said the market was having a “healthy breather” after consecutive days of gains.

“It's not surprising the market is down given the American market was down and commodity prices were also in the red,” Mr Heffernan said.

“We weren't going to be starting off with great gusto.

“There's only one of the top 20 stocks which is actually up so far, so it's a day where you pause to take a breath.

“It's nothing to be concerned about, because you can't keep going up at one per cent for ever. It's a healthy breather.”

All the major banks opened lower, with Commonwealth Bank down 63 cents, or 1.19 per cent, at $52.45, National Australia Bank falling 39 cents, or 1.35 per cent, to $28.53 and Westpac down 43 cents, or 1.82 per cent, to $24.25.

ANZ said it would sell its custodian services business to US banking giant JP Morgan as the Australian lender focuses on its core markets in the Asia Pacific.

Its shares were down 37 cents, or 1.66 per cent, at $21.88.

At 7.33am, the spot price of gold in Sydney was $US1144.00 per fine ounce, up $US1.91 from yesterday's closing price of $US1142.09.

Gold miner Lihir gained one cent to $3.57, Newmont was up five cents at $5.68, and Newcrest added 27 cents to $36.28.

Metals recycler Sims Metal Management announced a $475 million capital raising to fund a growth strategy, to raise $400 million from a fully underwritten institutional placement at $21 a share, the company said in a statement.

Sims shares were in a trading halt, last trading at $22.20.

In other materials stocks, Fortescue Metals was down eight cents, or 1.86 per cent, at $4.22, Bluescope Steel fell five cents, or 1.75 per cent, to $2.81, and Aquarius Platinum was 26 cents lower, or by 4.14 per cent, at $6.02.

Shopping centre group Westfield was down 27 cents, or 2.13 per cent, to $12.42, while Stockland was down four cents at $4.04.

Oil and gas producer Woodside says the costs of its Pluto LNG project have blown out by up to 10 per cent.

At 7.50am, Woodside shares were down $1, or two per cent, to $49.10.

Santos fell nine cents to $14.93 and Oil Search was down two cents at $5.90.

The most traded stock by volume was Baraka Petroleum, with 97.67 million shares worth $649,276 changing hands.

Baraka Petroleum shares were up 0.2 cent, or 33.3 per cent, at 0.8 cent.