Australian shares closed lower on Tuesday as a handful of underwhelming corporate reports and a shift in sentiment overnight in the US and Europe weighed on local blue chips.

The S&P/ASX 200 edged 1.2 per cent lower, wiping 85.1 points from the benchmark, which closed with 6961.8 points. The decline dents a steady rise in share prices that has slowly built over the past two months and dragged the index to below 7000 points for the first time in a fortnight.