Australian shares slipped on Tuesday, dragged by sharp losses in miners after a surge in COVID-19 cases in China weighed on iron ore prices, with weak commodity prices pressuring local energy and gold stocks further.

The S&P/ASX 200 index was down 0.8% at 7,090.7 points by 2340 GMT, retreating from a 1% gain made in the previous session.

“Markets remained in a risk-averse mood amid the continuing war in Ukraine and COVID-19-related lockdowns in China,” Westpac analysts said in a note.

Australia on Monday imposed new sanctions on 33 Russian oligarchs and business people over Russia’s invasion of Ukraine.

Meanwhile, the overnight Wall Street session ended on a grim note with the tech-heavy Nasdaq index leading losses as investors ditched tech and big growth names ahead of expected rate hikes by the Federal Reserve.

That dragged the local tech index 1.2%, with Australian shares of Block Inc dropping 5.7%.

Miners fell 3.8%, leading losses on the index, after steel prices hit two-week lows as surging COVID-19 cases in China - the world’s biggest steel producer and metals consumer - fanned worries over the country’s growth prospects.

Iron ore behemoth BHP Group, Rio Tinto and Fortescue Metals slid between 3.6% and 5.2%.

Rio Tinto proposed after market closed on Monday to buy 49% of Canada’s Turquoise Hill it does not already own for about $2.7 billion.

Oil and gold prices retreated after diplomatic efforts to resolve the Russia-Ukraine conflict calmed supply-disruption fears.

Energy stocks slid 2.9%, with heavyweights Woodside Petroleum and Santos down 4.5% and 3.8% respectively.

Gold stocks dropped 3.6%, with the country’s largest gold miner Newcrest Mining falling 2.7%, while St Barbara tumbled 4.1%.

Financial stocks bucked the overall negative trend to rise about 1.4% with the big four banks up nearly 1% each.

New Zealand’s benchmark S&P/NZX 50 index pared early losses to climb 0.14% or to 11,821.67 points. Pushpay Holdings outperformed with a 6.9% gain after forecasting a higher annual profit.