The benchmark S&P/ASX 200 was down 31.2 points at 4,008.3 after falls in Europe and the United States overnight, recovering some ground from earlier lows but still firmly in the red.

The caution comes ahead of a new European Union-International Monetary Fund audit of Greece and a German parliamentary vote on the new eurozone rescue plan.

The commodities-linked Australian dollar also fell and was trading at 98.09 US cents late in the session, from 98.87 US cents on Wednesday.