At 10:30 (AEST), the benchmark S&P/ASX 200 index was down 92.50 points or 1.76 percent at 5,159.80, while the broader All Ordinaries index was down 90.50 points or 1.71 percent at 5,210.80.
"Positive sentiment spilled into U.S. trading, and the SPX 500 index traded almost 4 percent higher in the first hour of the session," CMC Markets Chief Market Strategist Michael McCarthy said.
"However reports of increasing COVID-19 death rates soured sentiment, and U.S. indices finished slightly in the red."
The reversal weighed heavily on local stocks which plummeted at open before partially lifting, however energy and financials continued to weigh heavily both dropping by close to 2 percent in early trade.
In the financial space, Australia's big banks sank with the Commonwealth Bank down (2.18 percent), ANZ down (2.02 percent), National Australia Bank down (3.35 percent) and Westpac Bank down (3.54 percent).
Mining stocks were mixed with Rio Tinto up (2.03 percent), BHP down (0.98 percent), Fortescue Metals up (1.05 percent), and goldminer Newcrest up (3.07 percent).
The country's oil and gas producers also varied with Oil Search down (6.59 percent), Santos up (0.67 percent) and Woodside Petroleum down (1.46 percent).
Australia's largest supermarkets were mixed with Coles up (1.31 percent), and Woolworths down (0.55 percent).
Meanwhile telecommunications giant Telstra dropped (0.80 percent), the national carrier Qantas took off (1.57 percent) and biomedical firm CSL dropped (0.45 percent).
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