Australian stocks closed slightly lower on Tuesday, as shares of export-focussed healthcare companies slid due to a softer US dollar, and banks weakened after data showed a spurt in COVID-19 cases battered consumer confidence.

The S&P/ASX 200 closed 0.1% lower at 7,408.80 after rising 0.3% earlier in the day. The benchmark had added 0.3% on Monday.

Healthcare stocks gave up 1.2% as the US dollar failed to capitalise from a rise in Treasury yields. CSL led the decline with a 1.3% drop.

Risk sentiment was also hit as Australia suffered its deadliest day of the pandemic, with the Omicron variant pushing up hospitalisation rates to record levels.

"Investors continue to be cautious amid the COVID-19 situation," said Kunal Sawhney, chief executive officer of Kalkine Group.

"Quarterly updates will be the biggest drivers of the market in the days to come, besides sinusoidal economic factors and evolving COVID-19 developments."

Meanwhile, Australian consumer confidence slid to its lowest since October 2020, lower even than during the Delta variant surge, a survey from ANZ showed.

Heavyweight financials retreated 0.3%, with the country's four largest lenders falling between 0.2% and 0.4%.

By contrast, miners rose 0.6% after two straight sessions of losses, with Fortescue Metals Group and BHP Group up 0.4% and 1%, respectively, while South32 climbed 2.2%.

However, Rio Tinto dropped as much as 2% after the world's biggest iron ore producer forecast weaker-than-expected 2022 iron ore shipments due to a tight labour market and production delays.

New Zealand's S&P/NZX 50 inched 0.1% higher to 12,814.46, even as a survey showed business confidence and demand dropped in the fourth quarter of 2021 as the COVID-19 outbreak dragged on.