Sydney - Australian stocks lost ground at the opening bell Monday following the selloff last week on Wall Street.

The ASX 200 gave up 107 points, or 2.2 per cent, in the first hour of trading to 4,587.

Shares fell across the board, with mining stocks hit hardest because the financial crisis is slowing economies around the world and crimping demand for raw materials.

A drop in commodity prices has had a knock-on effect on the Australian dollar, which on the cross rates has fallen to a two-year low of 76 US cents. Just three months ago, the Aussie dollar was trading at close to parity with the US dollar.

When the Reserve Bank of Australia meets Tuesday, most analysts expect a rate cut, which would further discourage investors from holding the local currency.

While most economists are predicting a cut of one-quarter of a percentage point to 6.75 per cent in response to a slew of figures showing a slowing economy, there are some factoring in a 50-basis- point cut.

The RBA dropped rates last month for the first time in almost seven years. (dpa)