The New Year's hangover for the local bourse is lingering, with shares falling for a second day amid more conflict in the Middle East and questions about the aggressive US rate cuts many expect this year.
The benchmark S&P/ASX200 index on Thursday finished down 29.1 points, or 0.39 per cent, to 7,494.1, after dropping 1.37 per cent on Wednesday.
The broader All Ordinaries on Thursday fell 26.7 points, or 0.34 per cent, to 7,730.6.
The Australian dollar was buying 67.42 US cents, from 67.65 US cents at Wednesday's ASX close.