Australian stocks slipped on Friday, led weaker by banking shares after a poor reading on the U.S. labour market pushed Wall Street lower overnight and eroded confidence about its recent rally.

At midday east-coast time, the benchmark S&P/ASX200 Index was 40.5 points or 0.87 per cent lower at 4593.1 points, while the broader All Ordinaries Index had slumped 36.7 points or 0.78 per cent to 4643.3 points.

On a sector-by-sector basis, all sub-indices were in the red, with utilities and telecoms the worst performers, both dipping 1.03 per cent. Information technology, down 0.98 per cent, followed.

On the Sydney Futures Exchange, the December share price index futures contract took off 47 points at 4611 on a volume of 12,415 contracts.

The big four banks were weaker at noon, with ANZ Banking Group dropping 1.35 per cent to $23.55, Commonwealth Bank of Australia declining 0.7 per cent to $52.06, National Australia Bank losing 1.27 per cent to $25.62 and Westpac Banking Corp holding off 1.3 per cent to $23.41.

Investment bank Macquarie Group gave up 0.95 per cent to $36.39.

In the resources sector, global miner BHP Billiton was down 21 cents at $39.01 despite clearing a regulatory hurdle facing its $39 billion takeover bid for Canada's Potash Corp.

Mining rival Rio Tinto dropped 40 cents to $75.64, following news it would invest $US230 million ($242.63 million) to increase capacity at its Dampier Port facility by five million tonnes per annum, taking it to 230 Mt/a by the first quarter of 2012.

Fortescue Metals had added 5 cents or 1 per cent to $5.04.

Newcrest Mining was down 89 cents or 2.17 per cent at $40.05. The spot price of gold was $US1292.60 an ounce, down 85 US cents from yesterday's finish of $US1293.45 an ounce.