The Australian share market closed lower on Wednesday, dragged down by the four big banks.

Falls among financial stocks came despite some gains in the materials sector, with the big miners finishing strongly.

RBS Morgans Private client adviser Bruce Smith said the local market was pulled down by the poor performance of the nation’s major retail banks.

“The reason for that is there’s a pretty strong perception now that the banks are fully valued or overvalued and it’s a dangerous time to be continuing with the yield play,” he said.

UBS and Deutsche Bank have both declared the Australian banking sector as overpriced.

Mr Smith said investors were beginning to look back to the resources sector, which had recently been the laggard.

Adding to the pain among the financial stocks, National Australia Bank shares dived 59 cents to $30.95 after it announced plans to simplify its business and remove complexity and duplication.

ANZ dropped 57 cents to $28.48, Commonwealth Bank fell $1.20 cents to $69.38 and Westpac lost 66 cents to $30.50.

The mining giants all closed higher.

BHP Billiton gained 24 cents to $35.91 and Rio Tinto jumped to 18 cents to $62.10.

In other news Qantas shares gained 3.5 cents to $1.745 after it said a possible strike by hundreds of security screeners at Melbourne Airport over Easter would not have an impact on flights.

KEY FACTS

* At the close of trade on Wednesday the benchmark S&P/ASX200 index was 25.5 points, or 0.5 per cent, down at 5,092.4.

* The All Ordinaries index was 24.2 points, or 0.47 per cent, lower at 5,104.4.

* The March share price index futures contract was 23 points weaker at 5,091, with 38,729 contracts traded.

* National turnover was 1.6 billion securities worth $4.9 billion.