Australian shares have trimmed earlier losses following a better-than-expected March jobs report but the market still closed in the red.

The S&P/ASX200 benchmark index finished Thursday down 50.4 points, or 0.92 per cent, at 5,416.3 points, having earlier been down by as much as 2.2 per cent.

The All Ordinaries index was closed 55.7 points, or 1.01 per cent, to 5,467.6.

The Australian dollar meanwhile dropped to 62.86 US cents, down from 63.54 US cents at the close of markets on Wednesday.