Australian shares closed lower after an erratic session on Wednesday, weighed down by declines in mining heavyweights BHP Billiton and Rio Tinto following a drop in commodity prices, although sharp gains in takeover target Origin Energy trimmed losses.

Investors were also cautious ahead of the Federal Reserve's rate decision Wednesday as well as the release of first-quarter U.S. GDP data.

'Global markets are waiting on what the Federal Reserve will do tonight,' said Savanth Sebastian, equities analyst at CommSec. 'It will have an impact on the U.S. dollar and likewise the flow-on effect on commodity prices.'

The Fed is largely expected to cut interest rates by another quarter point to 2.0 percent.

The benchmark S&P/ASX 200 closed down 11.5 points or 0.2 percent at 5,595.4, after moving between 5,516 and 5,620.5. The All Ordinaries dropped 15.6 points or 0.3 percent to 5,657.

But gainers beat decliners 630 to 589, while 344 stocks were unchanged.

A total of 1.7 billion shares were traded, valued at A$6.9 billion.

The S&P/ASX 200 June futures contract was 24 points lower at 5,601.

The yield on the 10-year bond fell 0.07 percentage point to 6.275 percent, while the yield on the 90-day bills was unchanged at 7.795 percent.

($1 = A$1.07)