More signs of a slowing global economy helped sink the ASX as investors brace for a rise in Australian unemployment.
The market traded lower for almost all of Wednesday's session, and a hefty slump in China's retail sales for August reminded investors of coronavirus lockdown impacts.
Property investment and industrial production also slipped.
IG Markets analyst Kyle Rodda said while it was known that China's economy was weakening, the data showed expectations for economic growth need to be further downgraded.
Lockdowns could be at the fore of investors' minds on Thursday once Australian jobs figures for August are published.
Royal Bank of Canada analysts have tipped the unemployment rate to rise from 4.6 per cent to 5.1 per cent.
Continuing lockdowns in Canberra, Melbourne and Sydney are behind the pessimism.
Reserve Bank governor Philip Lowe this week warned the jobless rate could rise higher in the five per cent bracket.
In the US, stocks gave a poor lead as the increasing likelihood of a US corporate tax rate hike overshadowed lower than expected inflation figures.
The benchmark S&P/ASX200 index closed lower by 20.3 points, or 0.27 per cent, to 7417.
After 11 consecutive months of gains, the index is down by more than one per cent midway through September.
The All Ordinaries closed down by 17.1 points, or 0.22 per cent, to 7723.2.
Energy providers gave back some of the huge gains they made in the previous session and were the worst-hit category.
Beach Energy fell more than four per cent. Merging oil providers Santos and Oil Search fell by more than three per cent.
BHP proved a considerable burden on the market. Shares dropped 3.52 per cent to $40.26.
The shares fetched a record $54.55 on July 30. However they have declined steadily since BHP's full-year earnings in August.
BHP paid a bumper dividend from its earnings and will scrap trading on the FTSE 100 in the UK. These will move to the ASX.
Stockbrokers have said the UK shares were trading at a discount to the Australian ones. Investors have responded by selling those on the ASX.
BHP's chief rivals fared little better. Fortescue Metals and Rio Tinto each dropped more than one per cent.
Meanwhile Pilbara Minerals caught plenty of attention after it sold a form of lithium on the spot market for $US2240 ($A3056) per tonne.
The company sells most of its spodumene concentrate through long-term contracts but has been testing demand through online auctions.
The 8000-tonne cargo sold was a lesser grade (5.5 per cent) than the industry standard of six per cent.
Shares closed up 8.41 per cent to $2.45.
In banking, Westpac was the only one of the big four higher. Shares rose 0.27 per cent to $25.79. Its rivals lost less than half a per cent.
Healthcare shares were best on the market and higher by almost one per cent. CSL gained 1.4 per cent to $304.88.
Telecommunications group Uniti will retain an executive director while he tries to clear his name of insider trading charges.
The Australian Securities and Investments Commission has charged Vaughan Bowen with two counts of insider trading of shares in carrier Vocus.
Uniti said Mr Bowen would continue in his role until the matter had been decided.
Shares closed up 0.26 per cent to $3.91.
The Australian dollar was buying 73.29 US cents at 1728 AEST, lower than 73.36 US cents at Tuesday's close.
ON THE ASX
* The benchmark S&P/ASX200 index closed lower by 20.3 points, or 0.27 per cent, to 7417 on Wednesday.
* The All Ordinaries closed down by 17.1 points, or 0.22 per cent, to 7723.2.
* At 1728 AEST, the SPI200 futures index was up one point, or 0.01 per cent, at 7416 points.
One Australian dollar buys:
* 73.29 US cents, from 73.36 cents on Tuesday
* 80.25 Japanese yen, from 80.77 yen
* 62.03 Euro cents, from 62.10 cents
* 52.97 British pence, from 53.97 pence
* 103.21 NZ cents, from 103.20 cents.