The Australian share market opened lower today and continued to fall, following a negative lead from Wall Street overnight.

Both major indices slid on weaker sentiment throughout early trading, and by mid-afternoon the S&P/ASX200 index had dropped 101 points, while the All Ordinaries lost 96.

Meanwhile, US stocks fell overnight amid growing alarm over the stability of regional banks. The losses came despite US Treasury’s promise of a rescue package for troubled mortgage giants Freddie Mac and Fannie Mae.

By close of trade on Monday the Dow Jones Industrial Average finished down 45 points, while the Nasdaq composite fell 26.

In Asian trading today, Japan’s Nikkei was down 263 points by 2.30pm, while Hong Kong’s Hang Seng had plummeted 711.

In ASX news today, shares in troubled asset manager Allco Finance surged by as much as 27 per cent following the announcement that it had reached agreement with its banking syndicate over the terms of its senior debt facility.

AFG said the new agreement would run until September 2009, and didn’t contain any market capitalisation clauses. The group, which has been working to reduce its debts since its dramatic market capitalisation collapse earlier this year, said it expected its senior debt facilities to fall to about $690 million by the end of July.

In other news, takeover target Roma Petroleum today recommended Queensland Gas’s revised takeover offer to its shareholders, believing it to be superior to a rival offer from fellow explorer Bow Energy.

Roma said that QGC’s offer of 11 cents and 0.0177 of a Queensland Gas share for every Roma share held, provided shareholders with a higher degree of certainty than Bow’s all-share offer. Roma added that its directors had now accepted QGC’s offer for their own shareholdings, giving QGC a 30 per cent interest in the company.

Finally, miner Rio Tinto announced that it’s to invest more than $US500 million to upgrade its power infrastructure at its iron ore operations in the Pilbara region of Western Australia.

Rio said that it plans to build gas-powered generation and transmission infrastructure to replace its existing steam powered station, in a move that will cut CO2 emissions by almost a quarter.

In individual share price movements on the ASX this afternoon the main resource stocks mostly fell into the red. At 2:30, BHP Billiton was down 45 cents, Fortescue Metals fell 43, Rio Tinto lost $1.19 while Woodside Petroleum added $1.56.

The major banks were all down by more than three per cent in afternoon trading. At 2:30pm ANZ was down 60 cents, Commonwealth Bank fell $1.23, National Australia Bank dropped 93 cents, while Westpac lost 74.

Other blue chips followed the rest of the market down. AMP fell 29 cents, News Corp lost 48, Telstra fell four cents, while Woolworths dropped 89.