Australian shares have closed lower as investors worry about global growth prospects and falling commodities prices.

Commodities prices have continued to lose ground, with iron ore falling 1.1 per cent overnight to $US38.65 per metric tonne.

The WTI oil price fell below $US37 per barrel for the first time since early 2009 before rebounding to close just two cents lower at $US37.63.

CMC Markets analyst Ric Spooner said the overall market weakness was essentially commodities-driven, despite some of the nation’s biggest resources players like BHP Billiton and Woodside finishing in positive territory.

“The markets seem to be focusing on the implications of excess capacity and what commodity prices continuing to fall says about the prospects for global growth and demand,” Mr Spooner said.

“That seems to be the focus even though in many respects falling oil prices is a positive story.”

Weaker oil prices could mean greater discretionary spending, lower input costs for companies and potentially a slower trajectory of rate cuts, he said.

The nation’s big miners were mixed, with BHP Billiton shares 11 cents, or 0.65 per cent, higher at $17.16, Rio Tinto was 35 cents, or 0.83 per cent, weaker at $42.05 and Fortescue Metals shares were 1.5 cents higher at $1.82 at 1630 AEDT.

In the energy sector Woodside added 14 cents to $27.03, Santos rose 19 cents to $3.50 and Oil Search was six cents higher at $6.35.

Commonwealth Bank was the only big bank in positive territory, adding 15 cents to $80.29, but Westpac fell 19 cents to $32.05, NAB lost 35 cents to $28.96 and ANZ was 39 cents weaker at $26.43.

KEY FACTS

* At the close on Wednesday, the benchmark S&P/ASX200 index was DOWN 28.1 points, or 0.55 per cent, at 5,080.5.

* The broader All Ordinaries index was DOWN 28.1 points, or 0.54 per cent, at 5,129.9.

* The December share price index futures contract was DOWN 35 points at 5,074 with 31,318 contracts traded.

* At 1645 AEDT, national turnover was 1.9 billion securities worth $5.6 billion.