The S&P/ASX200 fell 27.1 points on Tuesday, down 0.31 per cent to 8,803.9, as the broader All Ordinaries lost 32.3 points, or 0.36 per cent, to 9,004.7.
The raw materials sector extended an early loss to more than 2.6 per cent by the close after the strike on a Qatari LNG gas container ship put upward pressure on oil prices and reignited global growth fears.
Crude prices remain at pre-conflict levels, with analysts tipping the US-Iran ceasefire will be extended - perhaps with occasional disruptions - until at least the US mid-term elections in early November.
"When you look at what is happening with the crude oil price, it seems to be fairly comfortable that nothing too inflammatory is going to come out of the news today, but then you look at the big miners and the gold stocks and they're being absolutely pummelled," IG market analyst Tony Sycamore told AAP.
The All Ordinaries gold sub-index fell more than four per cent as the precious metal slipped to $US4,124 ($A5,944) an ounce, handing back some recent gains after a weak US jobs report sparked less-hawkish rhetoric from new US Federal Reserve chairman Kevin Warsh.
Mega miners BHP and Rio Tinto were also under selling pressure as both copper and iron ore prices dipped in the afternoon.
Banks and IT stocks helped offset some of the losses, as the financials and technology segments advanced more than one and two per cent each respectively.
Westpac was the best of the big four banks, up 2.4 per cent to $36.13, as the financial sector soared to its highest value since May 11, the day before the federal government flagged a raft of investment tax reforms later softened by a series of exceptions.
"I feel like the carve-outs certainly eased some concerns there around the budget; the housing market hasn't really responded to those, obviously," Mr Sycamore said.
"But the other part is that the market seems to be becoming more comfortable with the view that the RBA has tightened (interest rates) enough, so I like what I'm seeing in the banking sector."
The rally in IT stocks came as logistics software provider WiseTech Global surged more than five per cent after controversial billionaire co-founder Richard White stepped down as executive chair amid human trafficking allegations.
Mr White, who vehemently denies the allegations, will remain on the board as a director and keep his role as chief innovation officer.
In other company news, Nine Entertainment shares improved after it signed a deal to retain the free-to-air rights to broadcast the NRL and NRLW seasons from 2028 until 2034.
The Australian dollar is buying 69.44 US cents, up from 69.28 US cents on Monday at 5pm.
ON THE ASX:
* The S&P/ASX200 fell 27.1 points, or 0.31 per cent, to 8,803.9
* The broader All Ordinaries lost 32.3 points, or 0.36 per cent, to 9,004.7
One Australian dollar trades for:
* 69.44 US cents, from 69.28 US cents at 5pm AEST on Monday
* 112.52 Japanese yen, from 112.42 Japanese yen
* 60.76 euro cents, from 60.66 euro cents
* 51.90 British pence, from 51.96 pence
* 121.99 NZ cents, from 121.87 NZ cents
5°C