KEY POINTS:
The Australian stock market closed in negative territory, weighed down by heavy losses in the resources sector after a fall in commodity prices overnight.
At the close, the benchmark S&P/ASX200 index was 33.5 points lower at 6128.1, while the All Ordinaries dropped 34.7 points to close at 6205.7.
At 1615 AEDT on the Sydney Futures Exchange, the March share price index contract was 57 points lower at 6150, on a volume of 20,299 contracts.
CMC Markets senior dealer Dominic Vaughan said the local market was showing signs of nervousness in the face of recession fears in the United States.
"The resource sector has weighed pretty heavily on our market, with gold and other metals down overnight," Mr Vaughan said.
"The banking sector has held up, but overall, it has been a fairly disappointing day for the market, which is showing signs of nervousness at the moment.
"The main driver (of that nervousness) is a fear of a recession in the US."
The local market got off to a positive start after a mixed lead from Wall Street overnight, with the Dow Jones industrial average adding 27.31 points to 12,827.49.
Locally, Australian building approvals rose by a stronger than expected 8.9 per cent in November to 14,620 units, figures released today by the Australian Bureau of Statistics (ABS) showed.
But economists say the figures suggest the housing affordability crisis is set to continue.
The big miners were weaker, with BHP Billiton losing $1.02 to $39.00 and rival Rio Tinto dropping $1.67 to $127.50.
The banking sector was mixed, with ANZ adding six cents to $26.75, the Commonwealth Bank gaining 53 cents to $57.73 and Westpac putting on 10 cents to $27.25.
The National Australia Bank shed 29 cents to close at $36.01.
Biotechnology group Benitec picked up 7.5 cents or 71 per cent to 18 cents after the company has entered into a license agreement with pharmaceutical giant Pfizer to develop and commercialise its Hepatitis C virus (HCV) compound.
Gambling application provider Two Way lost 2.5 cents to seven cents after the NSW Government rebuffed an approach by the company seeking in-principle support for a proposed pay TV betting service.
The retailers were mixed, with David Jones gaining two cents to $5.24, Woolworths shedding 15 cents to $33.03 and Harvey Norman dropping one cent to $6.49.
Wesfarmers, the owner of Australia's second largest retailer Coles, lost three cents to $39.98.
The media sector was weaker, with Consolidated Media Holdings dropping three cents to $4.14, News Corp losing three cents to $22.70, its non-voting shares shedding nine cents to $22.09 and Fairfax retreating six cents to $4.51.
The energy sector was mixed, with Santos adding 10 cents to $14.65, Woodside dropping one cent to $51.36 and Oil Search falling six cents to $4.84.
The spot price of gold was higher and at 1624 AEDT was trading at US$862.30 an ounce, up US$5.75 an ounce on yesterday's local close.
The gold miners were mixed, with Newcrest adding 62 cents to $36.84, Lihir losing four cents to $3.69 and Newmont falling one cent to $5.96.
Junior explorer Gondwana Resources was the most traded stock on the market, with 229 million shares changing hands, collectively worth $12.7 million.
Gondwana Resources added 0.9 cents to close at 5.5 cents.
Preliminary market turnover reached 1.8 billion worth a total value of $4.8 billion, with 509 stocks moving up, 755 moving down and 347 unchanged.
- AAP