SYNEY: Australian shares closed lower on Wednesday, dragged down by the healthcare sector, as a record surge in Covid-19 cases in the country dented investor sentiment.

The S&P/ASX 200 index closed 1.3% lower at 6,075.10 compared with a 2.6% rise on Tuesday, its best session in over a month.

Healthcare stocks fell 3.2%, marking their worst session since May 27, weighed down by industry behemoth CSL Ltd and Cochlear, each dropping nearly 4%.

The world's largest miner BHP Group tumbled over 3% to drag the metals and mining index 1.3% down. Peer Rio Tinto declined 1.7%.

Citi downgraded the Australia-listed shares of BHP Group to "neutral" from "buy" after the mining giant lowered its full year underlying forecast due to Covid-19 concerns.

Technology stocks fell 2.4%, with Wisetech and Afterpay each shedding over 3.5%.

New Zealand's benchmark S&P/NZX 50 index slipped 0.1% to finish the session at 11,722.97. Top losers were Restaurant Brands New Zealand losing 2.5%, followed by Fisher & Paykel Healthcare Corp closing 2% down.

Australia recorded 501 new coronavirus infections in the past 24 hours, its highest since the epidemic took hold in March, with Victoria state, of which Melbourne is the capital, accounting for almost 97% of the new cases. "The fact that metro Melbourne, which is about 5 million people, has already been in a lockdown for the last couple of weeks and still not seeing a drop in cases is probably something to be a little concerned about," said Steven Daghlian, market analyst at CommSec.