Australian shares drop ahead of expected RBA rate pause

After gaining for five consecutive weeks, US indexes slumped overnight as investors questioned whether tech stocks may have been overbought, CMC Market analyst Tina Teng said.

The tech-heavy Nasdaq dropped 0.8 per cent, the S&P 500 slipped 0.5 per cent and the Dow Jones edged 0.1 per cent lower as bond yields bounced back from their sharpest monthly drop since 2008.

Nine of the 11 official ASX sectors were lower at noon, with only health care and utilities making gains.

Mining stocks weighed down the index. BHP dropped 1.4 per cent, Rio Tinto slid 1.2 per cent, and Fortescue was 1.7 per cent lower.

Goldminer Northern Star plunged 4.4 per cent as the gold spot price came off a record high, while Evolution entered a trading halt after announcing a $525 million capital placement to acquire an 80 per cent stake in NSW gold and copper mine Northparkes.

Of the big banks, CBA and NAB both fell 0.5 per cent, ANZ dropped 0.6 per cent, and Westpac was 0.3 per cent lower.

Australia's largest electricity retailer Origin Energy soared 2.4 per cent after shareholders rejected a $20 billion takeover bid from a Brookfield-led consortium.

Investors have oversold the stock relative to its historical valuation and solid medium-term outlook, RBC Capital Markets analyst Gordon Ramsay said.

Origin shares have fallen 15 per cent since October, when it became clear the deal was doomed to fail given the opposition of its largest shareholder, AustralianSuper. 

Health-care start-up Mesoblast slumped 17.3 per cent to 31.75c after announcing it will undertake a $55 million capital raise at 30c per share.

I nvestors are hoping for no surprises when the Reserve Bank meets for the final time this year at 2.30pm AEDT. 

The market is pricing a near-zero chance of a rate rise following a lower-than-expected inflation readout for October.

The Australian dollar was buying 66.13 US cents, from 66.56 US cents at Monday's ASX close.