The share market has roughly halved its early losses, as investors digest the Italian election result.
The All Ordinaries was down 1.3 per cent early on, as many investors feared a Berlusconi victory in the Italian election, or a complete deadlock in both houses of Parliament.
The market has bounced back since, with it becoming apparent that the pro-euro centre-left coalition had won a majority in the lower house, however the lack of a majority for any of the coalition groups in the Senate has continued to keep shares in the red.
Following a steep overnight slide of 1.6 per cent for New York's Dow Jones Industrial Average, Tokyo's Nikkei was down 1.2 per cent and Hong Kong's Hang Seng 0.3 per cent.
Around 1:10pm (AEDT) the All Ordinaries index was off 0.5 per cent to 5,047, while the ASX 200 was down 24 points to 5,032.
The big four banks have recovered from steep early losses, with Westpac and the Commonwealth Bank roughly even at $30.35 and $65.77 respectively.
ANZ was down 0.5 per cent and NAB down 0.6 per cent, both much smaller losses than earlier in the day.
Australia's top miners, BHP Billiton and Rio Tinto lost 0.8 and 0.6 per cent respectively, while smaller miners were down more, such as Fortescue (off 2.4 per cent) and Oz Minerals (down 1.8 per cent to $6.66).
Retail stocks are struggling: Harvey Norman was down 3.2 per cent, Myer 2.3 per cent, David Jones 1.4 per cent and JB Hi-Fi 0.6 per cent.
Even the owners of the major supermarket chains have slipped on the broader sell-off: Woolworths had fallen 1.2 per cent after yesterday hitting a record high, while Wesfarmers was off 0.7 per cent to $40.34.
QBE Insurance was off 2.3 per cent to $12.73 after cutting its full-year dividend.
Whitehaven Coal was down 2.3 per cent to $2.93 after its latest profit report.
The Australian dollar was buying 102.85 US cents.