The ASX200 has dropped 0.1 per cent, with losses by consumer discretionary and tech companies outweighing gains by goldminers and oil producers.
The local share market has finished slightly lower as the world waits to see if the conflict in the Middle East spirals into all-out war.
The benchmark S&P/ASX200 index on Wednesday finished down 10.7 points, or 0.13 per cent, to 8,198.2, while the broader All Ordinaries dropped 12 points, or 0.14 per cent, to 8,469.9.
Moomoo analyst Jessica Amir said traders had ducked for cover in a classic risk-off mode after Iran launched around 180 missiles at Israel overnight.
The US dollar, gold and oil rose while US equities dropped, especially tech stocks. Microsoft fell 2.3 per cent while defence contractor Lockheed Martin climbed 3.6 per cent.
Naeem Aslam, the chief investment officer for Zaye Capital Markets, agreed that traders' focus was solely on the escalation of tensions in the Middle East and its potential impacts on Iranian oil, gas, and nuclear facilities.
"What traders are looking at is a potential situation under which Iran's oil structure faces major disruption, and we see oil prices shooting towards the sky," Mr Aslam wrote.
Diplomatic efforts had yielded no results, and there was an improbable but real possibility of a larger conflict if Iran's allies such as Russia and Qatar support the country, Mr Aslam wrote.
Seven of the ASX's 11 sectors finished lower on Wednesday, with financials flat and energy, materials and utilities higher.
Consumer discretionary names were the biggest losers, collectively dropping 1.7 per cent as K mart owner Wesfarmers fell 2.3 per cent and Flight Centre retreated 2.4 per cent.
Energy was the biggest gainer, rising 2.4 per cent as Woodside added 3.1 per cent, Santos climbed 2.4 per cent and uranium developer Deep Yellow advanced 3.1 per cent.
Larger goldminers also gained ground as the yellow metal changed hands at $US2,648 an ounce, with Evolution climbing 1.3 per cent and Newmont adding 1.3 per cent, although some mid-tier miners dipped.
Elsewhere in the mining sector, BHP and Fortescue both advanced 0.9 per cent, to $45.06 and $20.14, respectively, while Rio Tinto added 0.2 per cent to $125.96.
The big four banks were mostly lower, NAB dropping 0.4 per cent to $36.98, Westpac dipping 0.3 per cent to $31.11 and ANZ edging 0.1 per cent lower at $30.11. CBA was the outlier, rising 0.6 per cent to $134.19.
Insurance companies IAG, Suncorp and QBE all rose, by 1.1, 0.3 and 0.7 per cent, respectively.
The tech sector was the second-worst performing, dropping 1.6 per cent, with Xero down 2.5 per cent and Wisetech Global retreating 1.7 per cent.
But Bigtincan Holdings soared 21.9 per cent to a seven-month high of 19.5 cents after the sales enablement platform said it had received a competing takeover offer, this one from a Nasdaq-listed special purpose acquisition company.
It had already been considering a takeover offer from a US private equity firm, Vector Capital.
The Australian dollar was buying 68.95 US cents, from 69.33 US cents at Tuesday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Wednesday down 10.7 points, or 0.13 per cent, at 8,198.2
* The All Ordinaries dropped 12 points, or 0.14 per cent, at 8,469.9
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 68.95 US cents, from 69.33 US cents at Tuesday's ASX close
* 99.18 Japanese yen, from 100.01 yen
* 62.28 euro cents, from 62.21 euro cents
* 51.89 British pence, from 51.78 pence
* 109.60 NZ cents, from 109.41 NZ cents
