The Australian sharemarket closed lower on Tuesday as the major miners and banks fell, pushing the market to its lowest level in almost two weeks.

The S&P/ASX 200 Index fell 29 points, or 0.4 per cent, to 6631.3, after a heavy dip late in the trading session.

BHP Group led the losses, falling 2.3 per cent to $41.78 while Fortescue Metals Group dropped 3.1 per cent to $21.48 and Rio Tinto slid 1.3 per cent to $112.42.

The news APRA would scrap the cap on bank dividends did little to boost sentiment in the sector. Commonwealth Bank fell 1 per cent to $83.07, ANZ slid 0.9 per cent to $22.97, NAB dipped 0.7 per cent to $23.38 and Westpac declined 0.5 per cent to $19.93.

Mesoblast suffered a heavy loss, tumbling 15.2 per cent to $3.85 after the stem cell therapy group missed the primary endpoint in a trial of its heart treatment Revascor.

CSL offset some of the market's losses, rising 1.2 per cent to $289.84 while Xero rose 2.5 per cent to a new record high of $147.47 following its inclusion in the S&P/ASX 50 Index.