The S&P/ASX200 fell 56 points on Wednesday, down 0.64 per cent, to 8727.9, as the broader All Ordinaries dropped 52.5 points, or 0.59 per cent, to 8869.
The heavyweight financials sector tumbled 1.6 per cent as the big four banks sold off after US bank earnings disappointed investors and as a shareholder address from CommBank's leadership highlighted a "demanding" local and global environment.
Underwhelming US bank profits had confirmed investor fears the big institutions were leaning into their equity books, while commercial lending, deal-making (for investment banks) and fixed income had been underperforming, Capital.com analyst Kyle Rodda said.
"They just haven't really been as profitable, and they don't look like they'll be as profitable going forward," he told AAP.
"While the composition of our banks is very different, if you see a lead like that from Wall Street, you basically see a sector-wide fall."
Miners also sold off, with gold prices still under pressure from elevated bond yields, while iron ore futures continued to linger at two-year lows.
Spot gold eased slightly to $US4158 ($A5938) an ounce, dragging the sub-index almost two per cent into the red.
Copper advanced during the session, despite a sell-off in global chip stocks putting the AI narrative on shaky ground this week, but it wasn't enough to support BHP or Rio Tinto, which dipped 0.7 per cent and 0.3 per cent respectively.
The energy sector advanced as oil prices held onto most of their recent gains, as tanker attacks in the Strait of Hormuz and fighting between Saudi forces and Houthi rebels continued to constrain crude outflows from the region.
Shares in oil and gas giants Woodside and Santos each jumped roughly 1.3 per cent.
Communications edged out energy as the best-performing sector, up 0.9 per cent as Telstra rebounded from a three-session slump.
The consumer-facing segments trimmed their earlier losses but still ended the day lower, with cyclicals trading just below flat and staples down 0.3 per cent.
In company news, uranium miner Paladin was the top-200's worst performer, its shares plummeting more than nine per cent after production tumbled 19 per cent in the September quarter due to a shutdown and pit transition.
AGL plans to vigorously defend a class action alleging its carbon neutral products breached misleading or deceptive conduct standards.
The Australian dollar is buying 69.97 US cents, up from 69.77 US cents on Tuesday, the greenback easing after a Federal Reserve official tempered fears around the US interest rate outlook.Â
ON THE ASX:
* The S&P/ASX200 lost 56 points, or 0.64 per cent, to 8727.9
* The broader All Ordinaries fell 52.5 points, or 0.59 per cent, to 8869
One Australian dollar trades for:
* 69.97 US cents, from 69.64 US cents at 5pm AEST on Tuesday
* 110.78 Japanese yen, from 110.21 Japanese yen
* 62.45 euro cents, from 62.30 euro cents
* 52.73 British pence, from 52.65 pence
* 124.51 NZ cents, from 124.44 NZ cents
