The Australian stock market closed three-quarters of a per cent lower after a slide on Wall Street as low United States jobless claims sparked fears the Federal Reserve will start tapering its stimulus program next month.
At 1615 AEST official market close, the benchmark S&P/ASX200 index fell 0.75 per cent to 5,113.9 points, while the broader All Ordinaries index lost 0.71 per cent to 5,100.1 points.
CMC Markets analyst Tim Waterer said the tapering worries sent the Australian market into reverse.
"Given the adverse reaction by US equities, it came as little surprise to see traders firmly in defensive mode on the Australian market," Mr Waterer said.
"It was a case of slim pickings when trying to find stocks in the green today however gold and oil companies found support from the push higher in commodity prices."
IG analyst Chris Weston said a fall in the Nikkei during the day's trade was not helping the local market.
A share price drop for Australia and New Zealand Banking Group Ltd despite the bank's slight lift in nine-month cash profit was "not only subtracting a reasonable amount of points from the market, but was also hurting sentiment towards the whole sector," Mr Weston said.
So far in earnings season, 31 per cent of ASX 200 companies have reported, with 49.1 per cent beating expectations on earnings per share and 33.3 per cent beating revenue expectations, Mr Weston said.
Financials were mostly lower, with the big four banks weighing on the market.
Commonwealth Bank fell 0.62 per cent to $73.30, while ANZ Banking Group lost three per cent to $29.45 after unveiling a slight lift in nine-month cash profit.
National Australia Bank dropped 0.67 per cent to $31.27 and Westpac Banking Corporation shed 1.08 per cent to $31.26.
Investment bank Macquarie Group fell 1.16 per cent to $44.42.
In the insurance sector, QBE dropped 1.05 per cent to $16.90, Insurance Australia Group lost 0.68 per cent to $5.81 and Suncorp fell 0.8 per cent to $12.34.