Broad-based losses pushed the benchmark S&P/ASX 200 index  down 0.8 percent or 44.70 points, to 5,668.84 at the close. On Tuesday, the index fell 1.0 percent.

"There's a very, very cool wind blowing through the Australian markets today," said James McGlew, executive director of corporate stockbroking at Argonaut. "We've followed the overnight lead from Wall Street."

Shares barely reacted to domestic growth data on Wednesday, which showed the economy decelerated by more than expected last quarter.

Financial stocks tumbled 1.3 percent to their lowest in a fortnight, dragging the main index.

The "Big Four" shed between 0.7 percent to 1.2 percent.

Consumer discretionary stocks dropped 1.2 percent, with gaming machine maker Aristocrat Leisure fell 4.4 percent to its lowest close since Jan. 12.

But the metals and mining index, which had fallen as much as 1.1 percent, erased losses earlier in the session to end flat, helped by a rise in iron ore prices.

Rare earth miner Lynas Corp Ltd sank 22.4 percent and was the top loser on the benchmark after it said Malaysia's decision to subject its local unit to two new pre-conditions for licence renewal was "disappointing".

In New Zealand, the benchmark S&P/NZX 50 index closed 1 percent or 84.230 points lower to finish at 8,781.53

Billing services provider Gentrack Group led losses as it declined 4 percent, while medical device maker Fisher & Paykel Healthcare was second biggest, down 3.5 percent.

The biggest e-commerce platform Trade Me Group bucked the trend to hit a record high after receiving a NZ$2.56 billion takeover offer.

The stock rose 3.1 percent, making it the top percentage gainer on both the New Zealand and Australian benchmark.