The Australian share market relinquished early gains to close around 0.6 per cent lower as relentless uncertainty over Greece's future and Chinese bank loan targets plagued investors.

At the close on Friday, the benchmark S&P/ASX200 index was down 26.6 points, or 0.66 per cent, at 4,029.2.

The broader All Ordinaries index was down 25.0 points, or 0.61 per cent, at 4,081.2.

On the ASX 24, the June share price index futures contract was 21 points lower at 4,031 with 30,374 contracts traded.

Comments by Italy's Prime Minister, Mario Monti, that Greece was likely to stay in the euro zone were enough to tip Wall Street's Dow Jones Industrial Index and S&P 500 into positive territory.

The local market opened higher, only to shed its gains by midday on concerns over Greece's future and after reports emerged that China's biggest banks may miss their loan targets for the first time in seven years.

"The fear of fallout from Greece - (investors) are connecting that with (local) banks and everything else," Stuart Smith, senior client adviser at Bell Potter Securities, said.

"The market is now pitching to the retail investor to keep their money in the bank by virtue of the yield."

The local market's seven biggest stocks, and most sectors, lost ground.

Market heavyweight BHP Billiton fell 38 cents, or 1.19 per cent, to $31.61, while Rio Tinto declined 43 cents to $55.93, and Woodside Petroleum slipped 11 cents to $31.00.

Major banks closed down, with Westpac Banking Corporation the worst performer after it shed 27 cents, or 1.32 per cent, to $20.12.

AMP was the best performing financial stock, finishing up six cents, or 1.57 per cent, to $3.89.

Other stocks to buck the downward trend included department store owner David Jones which gained seven cents, or 3.18 per cent, to $2.27, and News Corporation which jumped 27 cents, or 1.37 per cent, to $20.00.

Earthmoving equipment supplier Emeco firmed two cents to 86.5 cents after forecasting full year profit growth of up to 41 per cent due to strong demand in Australia, Canada and Indonesia.

Utilities also strengthened, with APA Group gaining eight cents, or 1.61 per cent, to $5.04, and ERM Power Ltd up 2.5 cents, or 1.33 per cent, to $1.905.

The spot price of gold in Sydney closed at $US1,562.06 per fine ounce, up $US2.31 from Thursday's local close of US$1,559.75.

National turnover was 1.5 billion securities worth $5.2 billion, with 444 securities trading up, 490 down and 377 steady.