After a flat start the Australian share market was in the red at noon, as falling banking stocks capped gains in the resources sector.
At 1200 AEDT, the benchmark S&P/ASX200 index was down 33 points, or 0.91 per cent, at 3,598.6, while the broader All Ordinaries index lost 25.6 points, or 0.72 per cent, to 3,528.2.
On the Sydney Futures Exchange, the December share price index contract was 53 points lower at 3,590 on a volume of 18,731 contracts.
IG Markets research analyst Ben Potter said Westpac's announcement of a $2.5 billion placement to institutional investors was well received.
"People say it's good to get it over and done with, and I would say it will be oversubscribed," Mr Potter said.
"It's set the cat among the pigeons: a lot of funds are selling pretty much across the board so they can take part in the raising, purchasing at $16, which is a very attractive price."
The bank's shares are in a trading halt and last traded at $17.88.
Westpac said the capital raising would strengthen its balance sheet and position it for growth.
"Commonwealth are down heavily and they were the ones tipped to do the next capital raising - they are seen to be the neediest," Mr Potter said.
"But Westpac has beaten them to it."
At 1202 AEDT, Commonwealth Bank retreated $2.7, or 6.62 per cent, to $30.63, National Australia Bank gave up 68 cents, or 3.24 per cent, to $20.28 and ANZ slipped 38 cents, or 2.55 per cent, to $14.55.
Higher commodity prices drove BHP Billiton shares 4.7 per cent, or $1.28, higher to $28.50 while fellow mining giant Rio Tinto advanced 97 cents, or 3.02 per cent, to $33.05.
Mr Potter said Wall Street was expected to pull back from recent gains because the market had already factored in forthcoming economic stimulus measures, driving the Standard & Poor's 500 index to positive territory in nine out of the past 11 sessions.
"People may be wary that the market may have got a bit ahead of itself," he said.
"(President elect) Obama is not going to announce them until January and they are not going to hit the economy until March, April."
He said trading volumes world-wide were currently "pretty light".
At 1205 AEDT, the spot price of gold in Sydney was $US771.70 per fine ounce, up $US5.15 on Monday's close of $US766.55.
Gold stocks were mixed. Lihir was steady at $2.32 at 1206 AEDT, Newcrest was up $1.09, or 4.17 per cent, at $27.26 and Newmont had gained five cents to $4.70.
Sweet crude for January delivery rose to over $US43 a barrel in New York overnight - well below recent historic highs.
At 1207 AEDT, Woodside Petroleum gave up 46 cents to $32.59, Santos dropped 22 cents to $13.03 and Oil Search gained seven cents to $4.33.
Making headlines on Tuesday, steel manufacturer BlueScope Steel has requested a trading halt pending an announcement on capital management initiatives.
Its shares last traded at $4.03.
China's largest zinc producer, Zhongjin, plans to take a controlling stake in lead and zinc miner Perilya for $45.46 million as part of a strategic partnership agreement.
It says it does not intend to accept CBH Resources's $32.2 million hostile scrip takeover offer for Perilya shares.
At 1218 AEDT, Perilya shares jumped three cents, or 20 per cent, to 18 cents.
Shares in CBH were down 2.5 per cent at 3.9 cents.
Harvey Norman said written sales for the four weeks ended Sunday rose by 1.2 per cent, compared to the same period in 2007, but retail margins remained under pressure.
Harvey Norman was down six cents, or 2.47 per cent, at $2.37 at 1218 AEDT.
Other retail stocks were also lower. Wesfarmers dropped 39 cents, or 2.3 per cent, to $16.59, Woolworths was down 46 cents at $26.36 and David Jones had inched two cents lower to $2.85.
