The Australian share market has reversed two days of strong gains, after minutes from the Federal Open Market Committee put investors on notice that it may start to wind back its stimulus measurers this year.
At the December meeting of the US Federal Reserve, a number of senior figures wanted to stop or slow down the central bank's bond-buying program "well before the end of 2013".
Their concerns are said to focus on the risk of higher inflation.
That unnerved local investors, and by the close the All Ordinaries index had given back 19 points to 4,743.
The ASX 200 index lost 16 points or 0.4 per cent to 4,724.
Mining stocks led declines despite the Chinese spot iron ore price hitting a 15-month high overnight of almost $US150 a tonne.
BHP Billiton shed two-thirds of a per cent to $37.91.
Rio Tinto lost 1 per cent.
Fortescue Metals slipped 3.5 per cent and smaller rival Atlas Iron lost 3.2 per cent.
The gold miner Newcrest was off 3.6 per cent.
Carsales.com was one of the best performers up 2.6 per cent after figures showed December was a record month for car sales in Australia.
The Federal Chamber of Automotive Industries reported almost 95,500 new cars were sold in December - a record for the month and up 15.7 per cent on a year ago.
The Commonwealth Bank ended flat at $63.25 after reaching an all-time high yesterday.
Media stocks did well; Fairfax lifted 1.9 per cent and APN News and media jumped 3.9 per cent.
Market heavyweight Telstra ended around a four-and-a-half-year high of $4.48.
A key services industry report shows activity in Australia's services sector remained in the doldrums in December, despite an interest rate cut and the busy Christmas shopping period.
The Performance of Services Index by the Australian Industry Group and the Commonwealth Bank fell 3.9 points to 43.2 last month.
That is below the key 50 level which indicates expansion.
The Australian dollar gave back just some of it gains against the greenback and about 5pm (AEDT) was buying 104.41 US cents.
On the cross rates it was buying 80.09 euro cents, 91.67 Japanese yen, 64.96 British pence and $NZ1.26.
West Texas intermediate crude eased a little to $US92.97 a barrel and spot gold prices were also lower at $US1,649 an ounce.