Weakness amongst the major banks has pulled the sharemarket lower, despite some mining stocks bouncing back from recent losses.
Invast Securities chief market analyst Peter Esho said resources stocks appeared to have arrested their fall, which came after a sharp drop in the iron ore price.
The price stabilised overnight.
Mr Esho said the local market had run up quite hard recently and was consolidating within a range of 5,350 to 5,450 points.
"There's no real game changer," he said.
Investors were waiting on more economic data from China on Thursday, including industrial production and retail sales, Mr Esho added.
"That will be very closely watched," he said.
Recent trade data from China has some analysts worried that China may not reach its economic growth targets.
Locally, Westpac lost 35 cents to $33.94, Commonwealth Bank shed 50 cents to $75.75, ANZ dropped 16 cents to $32.18 and National Australia Bank was 22 cents lower at $34.55.
In the resources sector, BHP Billiton gained six cents to $35.99, Rio Tinto added 17 cents to $61.39 and Fortescue Metals climbed 14 cents to $4.97.
Energy stocks were lower on the back of weaker oil prices.
Woodside Petroleum eased 28 cents to $38.36 and Santos backtracked 22 cents to $13.78.
* At the close on Wednesday, the benchmark S&P/ASX200 index was down 29.6 points, or 0.55 per cent, at 5,384.2 points.
* The broader All Ordinaries index was down 28.8 points, or 0.53 per cent, at 5,400.5 points.
* The March share price index futures contract was down 42 points at 5,373 points, with 35,075 contracts traded.
* National turnover was 1.9 billion securities worth $4.8 billion.
* The price of gold in Sydney was $US1,358.36 per fine ounce, up $US15.895 on Tuesday's closing price of $US1,342.465.