SYDNEY- The Australian share market closed slightly lower on low trading volumes because of the Melbourne Cup.

QBE Insurance led most financial stocks down and gold miners led the gainers as the precious metal increased in value.

The benchmark S&P/ASX200 index closed down 8.9 points, or 0.2 per cent at 4531.5, while the broader All Ordinaries index slipped 6.3 points to 4,540.

On the Sydney Futures Exchange at 1613 AEDT, the December share price index contract was down 23 points at 4,520 on a volume of 28,409 contracts.

Cameron Securities client adviser Adrian Leppinus said it had been a quiet trading day because of the Melbourne Cup, with QBE a notable mover.

Market turnover was 1.55 billion shares worth $3.12 billion, the lowest trading value in a month.

"QBE slumped on the report that the dollar's hurting them and that they won't do as well as previously thought," Mr Leppinus said.

"We had broker reports today trimming their target prices and earnings."

QBE slumped 86 cents, or 3.88 per cent, to $21.29, the biggest loser among the S&P/ASX 50. The insurer said on Monday that it had cut back its projected insurance revenue growth because the stronger Australian dollar hit its overseas takings.

The major banks were mostly weaker. Westpac, which will announce its full-year earnings on Wednesday, fell 16 cents, or 0.63 per cent, to $25.43 and National Australia Bank declined 51 cents, or 1.76 per cent, to $$28.39.

ANZ was little changed, losing one cent to $22.58 and Commonwealth Bank gained 37 cents to $51.28.

Other stocks that weighed on the market included Westfield, which fell 22 cents to $12.12, Wesfarmers, which declined 28 cents to $26.92 and Woodside Petroleum lost 54 cents to $47.70.

Mr Leppinus said the major gainers of the day had been the gold stocks, including Lihir Gold and Newcrest.

"Gold price been holding in there," he said.

"Lihir and Newcrest ... they're the winners today."

Newcrest gained $1.26, or 3.92 per cent, to $33.38, Lihir Gold rose 13 cents, or 4.28 per cent, to $3.17 and Sino Gold added 15 cents, or 2.29 per cent, to $6.70.

At 1624 AEDT, the spot price of gold in Sydney was US$1,063 per fine ounce, up US$16.67 on Monday's closing price of US$1,046.33.

Macmahon and Leighton were both among the gainers after the companies agreed to extended a memorandum of understanding with over partnering on large infrastructure projects.