Australia's share market has handed back some of the previous session's gains, as higher oil prices continued to weigh on the global growth outlook.
The S&P/ASX200 fell 41.7 points by midday, down 0.47 per cent, to 8741.7, as the broader All Ordinaries dropped 46.7 points, or 0.53 per cent, to 8890.3.
The dip came after a mixed overnight session for global markets, as higher oil prices and the persistently uncertain AI outlook weighed on risk sentiment, Westpac economist Neha Sharma said.
"Energy markets remained the key focus, with doubts over President Trump's proposed Russia-Ukraine energy ceasefire and concerns about fuel availability reinforcing expectations of prolonged supply disruptions," Ms Sharma said.
"The US dollar strengthened alongside higher oil prices, while the Australian dollar and most major currencies weakened against the greenback."
The combination of higher oil prices and a stronger US dollar weighed on local mining stocks, with the raw materials sector shedding 1.7 per cent as mega miners BHP, Rio Tinto and Fortescue bled lower.
Gold stocks were also under pressure as the precious metal slumped to $US4165 ($A5991) an ounce, dragging the sub-index 1.7 per cent into the red.
The Brent crude contract was trading at $US105.70 a barrel after spiking to an October-high above $US107 overnight, as US lawmakers from both major parties criticised US President Donald Trump's Russian diesel supply deal, and as fighting between Saudi forces and Houthi rebels continued.
Energy stocks outperformed at a local level with Santos, Woodside and Ampol each up more than 1.4 per cent, while coal producers were mixed and uranium stocks sold off after the AI narrative lost some shine overnight.
Australia's inflation outlook would continue to be impacted by developments in the Middle East, according to the Reserve Bank's September meeting minutes, which didn't rule out further cash rate hikes.
"The Board will remain focused on its mandate to deliver price stability and full employment and will continue to do what it considered necessary to achieve that outcome, including increasing the cash rate target further if required," the minutes read.
Financials inched higher, tracking with modest gains from the big four banks and major insurers, while Macquarie and most financial services companies slipped lower.
Consumer-facing stocks improved from their soft start to the week, with staples up 0.8 per cent and cyclicals gaining 0.4 per cent.
Australia's technology sector was the worst performer by lunchtime, down 2.4 per cent in a broad-based sell-off that tracked Nasdaq's overnight retreat.
At a company level, Telstra shares dipped 0.7 per cent to $4.62 as management fronted shareholders at the group's annual meeting, with a fresh apology from chief executive Vicki Brady for July's nationwide outage.
The telco's share price has fallen almost five per cent in less than three sessions.
The Australian dollar is buying 69.53 US cents, down from 69.77 US cents on Monday at 5pm.