Australia shares fall as miners slump on China scrutiny over iron ore prices

Australian shares fell on Tuesday as heavyweight miners were pressured by fears of higher regulatory scrutiny over surging iron ore prices in the steelmaking ingredient's top consumer, China.

The S&P/ASX 200 index fell 0.4% to 6,630.1 by 0016 GMT, with top miners BHP Group and Rio Tinto giving up 2.5% and 1.1%, respectively.

Iron ore futures fell more than 4% on Monday after China's steel producers pushed for a regulatory probe into skyrocketing prices.

Strong speculative interest in the steelmaking ingredient had pushed the benchmark spot price in China last week to the highest since February 2013 at $159.50 a tonne.

The broader metals and mining sub-index lost as much as 2.5% and was set for its worst session since Oct. 10, with Fortescue Metals Group easing 4%.

Beijing's top economic planner has also excluded Australia from a plan to allow coal imports from several countries without clearance restrictions, state-backed newspaper Global Times said.

The news sparked concerns over demand for Australian coal, sending shares of its producers sharply lower.

Whitehaven Coal lost 10.2%, while New Hope Corp tumbled 13%.

Energy companies also declined as an oil price rally lost steam on concerns of oversupply. Woodside Petroleum dropped 1.9%, while Santos gave up 2.6%.

Gold stocks fell over 1% as the rollout of a COVID-19 vaccine in the United States sparked optimism in wider financial markets for an economic recovery.

Financials ticked down 0.2% even after the country's banking regulator said banks would no longer have to hold a portion of their profit back starting next year, raising prospects for higher dividends.

New Zealand's benchmark S&P/NZX 50 index edged 0.1% lower to 12,824.37, with financials and utilities dominating losses.

The island nation saw consumer confidence rebound in the fourth quarter after a sharp fall in the preceding quarter.