SYDNEY/WELLINGTON: Tech stocks dragged Australian shares lower on Tuesday, in line with broader Asian markets, as investors worried that rising commodity prices could stoke inflation and lead to a sooner-than-expected interest rate hike by the US Federal Reserve.

The S&P/ASX 200 index slipped about 1.1% to close at 7,097, pulling back from a record closing high hit on Monday.

Local tech stocks slumped as much as 4.5%. Buy-now-pay-later firms were among the biggest losers, with index heavyweight Afterpay sinking about 9.5% to a seven-month low.

Investors now await the country's federal budget due later in the day that is expected to embrace billions in new spending to secure a recovery from the pandemic.

Miners slumped 1.3% with BHP Group and Rio Tinto retreating from record highs scaled on Monday to end 0.7% and 1.75% lower, respectively.

Consumer staple stocks, which are considered defensive and usually outperform tech stocks when borrowing costs rise, were the sole gainers on the index, finishing about 0.2% higher.

New Zealand's benchmark S&P/NZX 50 index extended losses into the fifth session, ending 0.2% lower.