Australian shares extended losses on Tuesday, dragged down by financials and healthcare stocks, but gains in mining and energy stocks on firm commodity prices capped losses.

The S&P/ASX 200 index ended 1.2% lower at 6,961.8 points at the close of trade, hitting its lowest level since August 3.

The index ended 1% lower on Monday. Global sentiment was subdued as investors awaited policy cues from US Federal Reserve chair’s speech at the Jackson Hole symposium of central bankers on Friday, while a spike in European energy prices stoked fears of recession.

Financials were the top laggards on the benchmark, falling for the fourth straight session after shedding 2.1%.

All of the so-called “Big Four” banks trading in negative territory.

While one cannot pin-point a specific reason, but higher bond yields in the wake of anxieties around Fed’s further rate hikes can be one cause for financials, said Kunal Sawhney, chief executive officer, Kalkine Group.

Additionally, healthcare stocks fell 1.7%, with biomedical giant CSL Ltd shedding 2%.

Capping losses, the export centric-miners and mining sub-index edged higher, with sector giants BHP Group adding 0.3%.

China’s iron ore and steel prices rose after the government’s latest benchmark lending rate cuts boosted sentiment, with the demand outlook also set to improve ahead of the peak season for construction steel.

Similarly, energy and gold stocks rose 1.3% and 0.6%, respectively, buoyed by gains in oil and bullion prices.

Australian shares post worst day in six weeks in sector-wide selloff

Energy sector majors Santos Ltd and Woodside Energy Group jumped 2.3% and 1.9%, respectively, while Australia’s largest gold miner Newcrest Mining rose 0.7%.

Boral Ltd rose more than 2%, even as the cement products maker said its annual underlying profit fell by a third, as it met its guidance.

New Zealand’s benchmark S&P/NZX 50 index ended 1% lower at 11,643.21.