Australian shares traded lower on Tuesday, tracking a lacklustre performance on Wall Street, as tougher restrictions imposed to contain coronavirus clusters domestically and around the world dented investor sentiment.

The S&P/ASX 200 index was down 0.47% at 6,684.2 points, as at 1131 GMT, dragged lower by energy and banking stocks. The benchmark ended 1.5% firmer on Monday.

Overnight, all three major indexes on Wall Street fell between 1.25% and 1.48%, ahead of crucial senatorial elections in Georgia state and amid a persistent surge in coronavirus cases.

Some investors are cautious about the pace of economic growth, while a new round of pandemic-related restrictions last month and a new variant of the coronavirus have cast a shadow on the outlook.

Down under, authorities continued to battle a virus outbreak in Sydney, even as Australia's largest city remained cut off from the rest of the country by state border closures and mandatory quarantine rules for travellers.

Among sectors, energy stocks drove losses on the benchmark, hurt by a drop in oil prices after OPEC+ failed to decide on Monday whether to increase output next month.

Brent crude futures fell 2.18%, while US West Texas Intermediate (WTI) crude lost 0.57%.

Gas explorers Woodside Petroleum and Oil Search slid 1.6% and 2.7%, respectively.

Financials lost 1%, as the so-called "Big Four" lenders fell in the range of 0.7% to 1% a day after rallying to their best day since Nov. 25.

On the other hand, mining stocks surged 1.9% on the back of soaring iron ore prices. Global miners BHP Group and Rio Tinto advanced 2.5% and 2.4%, respectively.

Ramelius Resources was among the top percentage gainers in the benchmark index, up 5.4% after the gold explorer provided a production update.

The number of issues on the ASX that advanced were 577, while 633 declined.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index rose 1.1%, helped by gains among consumer and utility stocks.