Australian shares slipped on Tuesday ahead of a central bank policy decision, as strong U.S. data sparked fears that the Federal Reserve could hike interest rates for longer.
The S&P/ASX 200 index fell 0.4% by 2330 GMT after closing 0.3% higher on Monday. S&P 500 E-minis futures were up 0.13%.
Data showed U.S. services industry activity unexpectedly picked up in November in the latest sign of underlying economic momentum that could keep the Fed on alert to tighten policy further as it fights high inflation.
In Australia, investor focus is on the central bank's last policy meeting for the year, where it is expected to deliver another modest 25 basis-point hike, a Reuters poll showed.
Energy stocks dropped 0.9% and were among the top losers on the benchmark, with sector majors Woodside Energy and Santos down 1.8% and 2%, respectively.
Beach Energy fell nearly 4% after the contractor of the Waitsia gas project, Clough Ltd, was placed under voluntary administration.
Miners dipped nearly 1% even though iron ore prices rose overnight on hopes of better demand from top steelmaker China after more cities eased COVID-19 restrictions over the weekend.
Global miners BHP and Rio Tinto slipped 0.7% and 0.6%, respectively.
Tech and gold stocks fell more than 2% each.
Financials were marginally higher, with the so called 'big four' banks up between 0.3% and 0.6%.
New Zealand's benchmark S&P/NZX 50 index slid 0.7% to 11,601.06. (Reporting by Navya Mittal in Bengaluru; Editing by Subhranshu Sahu)