The share market closed weaker as all sectors outside of telcos lost ground, and the Australian dollar has fallen to a two month low.
The benchmark S&P/ASX200 stock index dropped 0.5 per cent to 5,701.4 points, and optionsXpress market analyst Ben Le Brun said there was no single factor behind the broad sell-off.
"It has been a really disappointing day after having turned a corner on Friday, coupled with a good session on Monday," Mr Le Brun said.
"Today it has all fallen into a heap for no apparent reason."
The energy sector was a poor performer after US oil prices dropped more than two per cent overnight on expectations of higher supplies.
Woodside Petroleum and Santos each dropped by one per cent and Oil Search fell by 0.6 per cent.
Insurance giant QBE was another weight on the market, dropping 36 cents, or 3.5 per cent, to $9.82 after it said recent hurricanes and an earthquake in Mexico would deliver a pre-tax hit to earnings of about $US600 million.
The major banks lost ground in afternoon trade after a steady morning of trade, with Commonwealth Bank the worst of the big four, falling 1.6 per cent.
Mr Le Brun said bargain hunters were probably behind gains among the telcos, with Telstra adding 0.3 per cent to $3.47 and TPG Telecom gaining 1.4 per cent to $4.98.
The mining sector was weaker but some of the major companies gained ground, with Rio Tinto up 0.7 per cent, BHP Billiton up 0.1 per cent Fortescue Metals 0.6 per cent firmer.
Mr Le Brun said the Reserve Bank's decision to keep the cash rate at the record low of 1.5 per cent was widely expected, but governor Philip Lowe's statement caused the Australian dollar's fall.
The local currency dropped below 78 US cents for the first time since mid-July, as economists said the statement indicated the chances of a sooner-than-expected rate hike had diminished.
ON THE ASX:
* The benchmark S&P/ASX200 dropped 27.9 points, or 0.49 per cent, to 5,701.4 points.
* The broader All Ordinaries index dropped 27.1 points, or 0.47 per cent, to 5,764.2 points.
* The SPI200 futures contract was down 34 points, or 0.6 per cent, at 5,678 points.
* National turnover was 2.8 billion securities traded worth $4.6 billion.
CURRENCY SNAPSHOT AT 1700 AEDT:
One Australian dollar buys:
* 77.92 US cents, from 78.20 US cents on Monday
* 88.17 Japanese yen, from 88.26 yen
* 66.56 euro cents, from 66.47 euro cents
* 58.81 British pence, from 58.58 pence
* 108.88 NZ cents, from 108.71 NZ cents
The spot price of gold in Sydney at 1700 AEST was $US1,269.35 per fine ounce, from $US1,273.99 per fine ounce on Monday.
BOND SNAPSHOT AT 1630 AEDT:
* CGS 4.50 per cent April 2020, 2.0364pct, from 2.0392pct on Monday
* CGS 4.75pct April 2027, 2.7894pct, from 2.7943pct
Sydney Futures Exchange prices:
* December 2017 10-year bond futures contract at 97.13 (implying a yield of 2.87pct), from 97.1 (implying a yield of 2.9pct) on Monday.
* December 2017 3-year bond futures contract at 97.82 (2.18pct), from 97.79 (2.21pct).
(*Bond market closes taken at 1630 AEDT previous local session; currency closes taken from 1700 AEDT previous local session)