Australia shares end flat as miners help offset broader losses

Australian shares ended flat on Tuesday, as gains in mining and gold stocks helped offset broader market losses driven by concerns over a COVID-19 cluster in Sydney and uncertainty surrounding Senate runoffs in the United States.

The S&P/ASX 200 index closed down 0.03%, having fallen as much as 0.7% during the session.

The country's most populous state New South Wales called on residents in three cities to be tested for COVID-19 and isolate, amid worries that a Sydney cluster may have spread to regional areas after a visitor from the city tested positive.

Virus concerns hurt a wide range of sectors, with real estate, industrials and tourism-related stocks taking a hit. Financials and energy firms shed over 1% each.

Broader risk sentiment also took a hit ahead of dual runoff elections in Georgia, with control of the US Senate at stake.

"I think the markets are pricing in the Republicans holding at least one of the Senate seats. However, if the Democrats pick up both the seats ... it means much higher risk of increased regulations and higher taxes," said Mathan Somasundaram, CEO at Sydney-based firm Deep Data Analytics.

"That's negative for the U.S markets, as well as everyone else," he added.

Australian shares of Virgin Money UK slid to a near two-week low and were among the top losers on the benchmark as England went into a new national lockdown to contain a surge in COVID-19 cases.

However, gains in miners and gold stocks on the back of robust commodity prices helped the S&P/ASX 200 index limit losses.

The gold sub-index climbed as much as 3.3% to hit its highest since Nov. 19, while mining stocks scaled their highest level since July 2008 following a jump in iron ore prices due to supply concerns.

Mining heavyweights Rio Tinto, BHP Group and Fortescue Metals Group gained between 2% and 3%, with the latter two hitting record highs.

New Zealand's benchmark S&P/NZX 50 index gained 2.1% in its first trading session of the year, with utility stocks gaining the most.