The Australian share market closed in the red after financial stocks fell following the Federal Treasurer's pledge to release banking competition measures within the next week. The benchmark S&P/ASX200 index was down 26.9 points, or 0.57 per cent, at 4,699.9 points, while the broader All Ordinaries index fell 24.3 points, or 0.5 per cent, to 4,791.7 points. On the ASX 24, the December share price index futures contract was down 29 points at 4,704 points, with 28,175 contracts traded. ANZ was down 34 cents, or 1.45 per cent, at $23.15. The bank said it expected its funding costs would continue rising putting its margins under pressure for at least 18 months as it replaced pre crisis debt at higher post crisis prices. Westpac was down 18 cents at $21.76, National Australia Bank shed 34 cents, or 1.42 per cent, to $23.62 and Commonwealth Bank backtracked 16 cents to $49.60. Rio Tinto was up 17 cents at $87.51 but BHP Billiton gave up 22 cents to $44.86.

Energy stocks were also weaker after the oil price eased from two year highs overnight. Woodside was 17 cents lower at $42.73, Santos retreated 18 cents, or 1.42 per cent, to $12.47 and Caltex, which has recently been outperforming the market, gave up 36 cents, or 2.48 per cent, to $14.14. Fairfax eased 2.5 cents, or 1.73 per cent, to $1.42. Consolidated Media was flat at $3.20, News Corp put on seven cents to $16.38 and its non-voting scrip inched one cent lower to $14.48. Qantas also came under the spotlight as it appeared in Sydney's Federal Court against Rolls-Royce, the maker of engines for its A380 fleet. Qantas dipped five cents, or 1.86 per cent, to $2.64. In other company news, Aston Resources said it had inked a deal to sell a 15 per cent stake in its flagship Maules Creek coal project in New South Wales to Japan's Itochu for $345 million. Shares in Aston were up 42 cents, or 5.26 per cent, at $8.41.

The spot price of gold in Sydney was $1,392.20 per fine ounce, down $29.35 from Tuesday's closing price of $1,421.55. Gold miner Newcrest was 15 cents weaker at $41.35. ING Industrial Fund was the most traded stock by volume, with 63.01 million shares changing hands worth $32.6 million. ING Industrial Fund shares were unchanged at 51.5 cents. Preliminary market turnover was 2.48 billion shares traded for $5.2 billion, with 505 stocks up, 629 down and 368 unchanged.

The Australian dollar fell against the U.S. dollar Wednesday while bonds also sank, reflecting the impact of higher U.S. Treasury yields. The impact of U.S. President Barack Obama's decision earlier this week to extend Bush era tax cuts also helped provide support for the U.S. dollar, weighing on any potential gains for the Australian currency. The Australian dollar traded at $0.9790, down from $0.9911 late Tuesday. Against the Japanese yen, the currency traded at 82.155, up from 81.73.