The Australian stockmarket closed in negative territory on Wednesday, with financials and miners dragging down the market.

The benchmark S&P/ASX200 index finished 36 points or 0.8 per cent lower at 4537.2. The broader All Ordinaries index slumped 34.7 points, or 0.8 per cent, to 4578.3.

Among the sectors, financials lost 1.2 per cent, while materials dropped 0.7 per cent and energy shares were 1.1 per cent lower.

Analysts said the local bourse followed the lead from Wall Street, which fell overnight amid fears about European debt levels

The general malaise came off the back of a very ordinary session for offshore markets, according to CMC Markets institutional equities dealer Anthony Whitaker.

"Weaker-than-expected German manufacturing data, combined with a shaky performance on European bond markets, saw investors running scared and into the safety on gold."

"Wall Street suffered in kind as traders realised that European debt issues were very much alive and well."

Burrell Stockbroking director Richard Herring, however, said today's fall should not raise concerns.

According to him, "The market has enjoyed a strong run over the last four weeks, from late August, so a little bit of a breather today is not too damaging."

Foster's bucked the trend, with shares of the beverages giant closing at their highest since January 2008, up 27 cents or 4.5 per cent to $6.34, after it rejected a takeover offer for its wine assets.

The four major banks all finished in the red. Commonwealth Bank shed 57 cents to $51.78, Westpac dropped 33c to $22.70, National Australia Bank slumped 45c to $23.95, while ANZ edged down 27c at $23.49.

The two big miners likewise lost ground, with BHP Billiton 53 cents lower at $37.91 and Rio Tinto giving off 91 cents at $73.44.