The Australian share market closed more than one per cent lower, led by sharp declines in the banking and resources sectors. The benchmark S&P/ASX200 index was down 76 points, or 1.62 per cent, at 4,624.3 points, while the broader All Ordinaries index had fallen 77.7 points, or 1.62 per cent, to 4,705.1 points.

On the ASX 24, the December share price index futures contract was down 79 points at 4,634, with 39,832 contracts traded. Falling stocks outnumbered those that managed a gain by three to one on Wednesday, as local market players reacted to steep losses on offshore markets amid nervousness regarding Ireland's financial position, and backpedalling commodities prices. Market concerns that China would tighten its monetary policy to rein in inflation also weighed on the local market.

The result was a sea of red among the blue chips, with just one stock on the S&P/ASX20 closing in positive territory CBA edged up one cent to $49.90. The miners were hit hard, with Rio Tinto the worst performer on the S&P/ASX20 slipping 3.18 per cent, or $2.75, to $83.69. Woodside Petroleum ended 2.87 per cent, or $1.21 lower at $40.95 while Newcrest Mining closed down 2.68 per cent, or $1.10, at $40.00.

BHP Billiton ended down 2.2 per cent, or 98 cents, at $43.47, while Fortescue Metals finished 20 cents lower, or 2.95 per cent, at $6.58. Although Commonwealth managed a small gain, the other three big retail banks closed more than one per cent weaker. ANZ dipped 40 cents to $22.82, National Australia Bank was off 35 cents at $24.43 and Westpac shed 27 cents to $21.93. Making news on Wednesday, taxi fare payment company Cabcharge Australia Ltd said it was cautiously optimistic about the period ahead, given encouraging signs in the domestic economy. Cabcharge closed down 14 cents, or 2.4 per cent, at $5.70.

Macarthur Coal said first half profit may triple in 2010/11, from a year earlier, on the back of demand growth and a tightening market. The outlook helped lift the stock one cent higher to $11.41. West Australian Newspapers' first quarter results, released 25 minutes before the close of trade, showed net profit for the three months to September 30, 2010, rose 2.6 per cent from the prior corresponding period.

The stock ended down 18 cents, or 2.49 per cent, at $7.05. Australia's competition regulator said after the market closed on Wednesday it would oppose Metcash's proposed takeover of Franklins supermarket business. Metcash finished the local session down one cent at $4.50. The spot price of gold in Sydney was $1,337.90 per ounce, down $24.05 from Tuesday's local close of $1,361.95.

The most traded stock by volume Mutiny Gold, with 89.2 million securities changing hands for $8.3 million. Mutiny, which published some drilling results on Wednesday, finished up 3.8 cents, or 52.78 per cent, at 11 cents. Preliminary market turnover was 2.57 billion shares worth $5.98 billion, with 266 stocks up, 891 down and 328 unchanged.

Continued uncertainty over the extent of an expected bailout for the Irish government remained the driver for the Australian dollar Wednesday, dragging the high yielding currency lower. Ireland is expected to remain the focus during London and the U.S. trading sessions, with some attention on the Bank of England's policy meeting minutes and U.S. housing data. The Australian dollar traded at $0.9763, down from $0.9864 late Tuesday. Against the Japanese yen, the currency traded at 81.445, from 81.495.