Australian shares ended lower for a second straight session as the growing uncertainty due to widening coronavirus lockdowns kept investors nervous.
The benchmark S&P/ASX200 index lost 33.8 points, or 0.46 per cent lower, at 7252.20, while the broader All Ordinaries index fell 33.9 points, or 0.45 per cent, to 7525.80.
Local investors latched on to the dampened sentiment across the region amid fears the spreading Delta variant of the coronavirus will hurt global economic recovery.
"Markets have been jittery because of the lockdown uncertainty. No one knows exactly how long some of these are going to last and there's also been a spike in cases," CommSec market analyst Steven Daghlian said.
"The market is being quite cautious, and it wouldn't be surprising to see the volatility continue until we get a bit more clarity."
NSW reported another 78 cases on Tuesday, with infections showing no signs of falling despite three weeks of lockdown.
Neighbouring Victoria reported 13 new cases, prompting it to extend lockdown for at least seven days, while South Australia announced it will also enter a seven-day lockdown.
The decisions have sparked concerns about the hit to economic recovery.
The nervousness was most visible in mining shares, with heavyweights BHP and Rio Tinto sliding more than 2.5 per cent, while Fortescue Metals lost 1.0 per cent.
BHP shares were also affected by the global miner reporting a dip in fourth quarter iron ore production, even as annual output for many of its other divisions also declined.
Energy stocks also suffered after oil prices plunged over worries about future demand and by an OPEC+ agreement to increase supply. Still, the damage was limited by a 6.2 per cent surge in Oil Search shares to $3.90 after confirmation that rival Santos is pursuing an unsolicited takeover bid for the company.
Energy suppliers AGL and Origin ended more than 2 per cent lower.
Defensive sectors such as healthcare and consumer staples continued to defy the market trend. Protective clothing maker Ansell and Biotech giant CSL were among the major gainers, rising nearly 2 per cent each.
JB Hi-Fi shares also jumped 3.7 per cent at $49.51 after the white goods retailer reported preliminary full year results showing sales were up 12.6 per cent and net profit had soared 67.4 per cent.
ANZ was the only one of the Big Four banks in the green, closing 0.6 per cent higher at $27.32.
Meanwhile, the risk-sensitive Australian dollar slipped further. It was buying 73.18 US cents by 1700 AEST, down from 73.81 US cents at Monday's close.
ON THE ASX
* The benchmark S&P/ASX200 index on Tuesday closed down 33.8 points, or 0.46 per cent, to 7252.20.
* The All Ordinaries closed lower by 33.9 points, or 0.45 per cent, to 7525.80.
* At 1700 AEST, the SPI200 futures index was unchanged at 7161 points.
One Australian dollar buys:
* 73.18 US cents, from 73.81 cents on Monday
* 80.22 Japanese yen, from 81.13 yen
* 62.14 Euro cents, from 62.53 cents
* 53.69 British pence, from 53.68 pence
* 106.06 NZ cents, from 105.57 cents.