Australian shares edged lower on Wednesday, extending Tuesday's 0.7% drop after a series of record highs in earlier sessions.
The S&P/ASX 200 declined by 10.7 points or 0.1% to 8198.2, with 8 out of 11 sectors closing lower.
Australian bond yields slipped by three basis points, while gold prices remained near record highs, trading at US$2658.07 per ounce. The Australian dollar also rebounded, crossing the US$0.69 mark as optimism about China's economy boosted iron ore prices.
The energy sector outperformed, rising 2.5%, driven by fears of supply disruptions in the Middle East. Brent crude surged 1.3% to US$74.53 per barrel, while West Texas Intermediate (WTI) crude added 1.5% to US$70.88.
Among major miners, BHP gained 1.6%, and Rio Tinto advanced 1.2%, buoyed by a 1.1% increase in iron ore prices in Singapore. Gold miners also benefited from the rise in safe-haven demand, with Regis Resources up 2.5% and St Barbara advancing 2%.
The major banks weighed on the index, with Westpac falling 0.4% and both Commonwealth Bank and NAB slipping 0.3%. ANZ was unchanged in volatile trading.
Qantas was also among the biggest decliners, falling 3.3% and adding to the overall drag on the ASX.
On the bond markets, 10-year and 2-year rates were at 3.934% and 3.572%, respectively.