The Australian share market was lower at midday following a poor performance on global markets overnight and a slight increase in the domestic unemployment rate.

The bourse also took a bleak view of soft profit results from Telstra and Qantas.

The benchmark S&P/ASX200 Index fell 63.9 points, or 1.43 per cent, at 4391.6 points. The broader All Ordinaries Index, meanwhile, had lost 65.2 points, or 1.46 per cent, to 4414.5 points.

On a sector-by-sector basis, telecom was the worst performer, sliding 8.33 per cent. Energy followed with a 1.68 per cent decline. Health was down 1.36 per cent, while information technology gained 0.63 per cent.

On the Sydney Futures Exchange, the September share price index contract shed 71 points to hit 4360 points, with 21,204 contracts traded.

Pessimistic sentiment had kept driving the market after negative leads from offshore overnight, according to CityIndex market strategist Michael McCarthy.

He said the Federal Open Market Committee news on Monday night were quite distressing for the bourse.

''Although it is being painted as an ongoing stimulus, taking money from maturing mortgage securities and putting it into treasuries is actually withdrawing money from the private system.

''The market has become very concerned.

''The data supports the idea that clearly a global economic recovery is coming on - it is not the v-shaped recovery we were looking for - it will continue to be patchy and will vary enormously by region.''

Mr McCarthy said an increase in Australia's unemployment rate to a seasonally adjusted 5.3 per cent in July, compared with an unrevised 5.1 per cent in June, was increasing worldwide concerns.

Yesterday, the Australian share market joined a worldwide phenomenon, slumping the most in nine weeks, as fears about the global economy exceeded profit result from the Commonwealth Bank. Banks, miners and information stocks led the decline.

The benchmark S&P/ASX200 Index finished 85.2 points or 1.9 per cent lower, at 4455.5 points. The broader All Ordinaries Index had slumped 83.3 points, or 1.8 per cent, to hit 4479.5 points.