Australian shares closed lower on Wednesday, with a decline in the financial sector weighing on the market's performance after several major US banks reported third-quarter earnings.

The S&P/ASX 200 Index fell 56 points, or 0.64%, to close at 8,727.90.

JPMorgan Chase, Wells Fargo, Goldman Sachs, and Citigroup all reported quarterly results on Tuesday. Wells Fargo closed 3% lower in the previous US trading session after posting lower-than-expected net interest income and revenue, while JPMorgan also fell after missing quarterly profit forecasts for the first time in almost three years.

Australia's big four lenders all ended lower on Wednesday, contributing to an overall 1.6% decline for financial stocks, the biggest fall among Australian sectors for the day.

In economic news, the six-month annualized growth rate in the Westpac-Melbourne Institute Leading Index was unchanged month over month at negative 0.03% in September, with growth appearing to stabilize at a slow pace rather than stalling.

On the corporate front, AGL Energy (ASX:AGL) shed 2% after being served with class-action proceedings that allege the company engaged in misleading conduct and breached consumer guarantees in relation to its carbon-neutral products.

Meanwhile, Austal (ASX:ASB) surged 11% after it extended the due-diligence period for Hanwha Defence USA, which is evaluating a formal proposal to acquire the company's US operations.

London-listed mining giant Glencore (ASX:GLC) made its trading debut on the ASX and closed 2% lower on Wednesday.