Australian shares on Thursday closed at their lowest in seven weeks, pressured by financials and energy stocks, as worries around a global slowdown and surging COVID-19 cases in China hurt sentiment.

The S&P/ASX 200 index ended 0.9% lower at 7,020.1, marking a third straight session of losses.

Investors have fretted over a surge in COVID infections in China and its impact on economic growth while raising concerns around a global recession, following central banks’ aggressive monetary policy tightening to tame surging inflation.

The mood also muted during the holiday period, with volumes being at their lowest in a year.

Damian Rooney, the director of equity sales at Argonaut, said there was a “muted” response across Australia in general, but hinted at the fact that there might be some optimism pertaining to the cutting down of COVID curbs in China.

Back in Australia, Prime Minister Anthony Albanese said the country would not be making any changes to its rules around allowing travellers from China into the country, despite some countries making mandatory COVID tests a requirement.

Domestic energy stocks led the losses, with the down 4% as oil prices declined the back of poor demand outlook from China. Sector majors Woodside Energy and Santos dropped 4.4% and 3.7%, respectively.

Financials also slid, with the sub-index down about a percent.

All of the “Big Four” banks fell, with no. 3 lender Westpac down 1%.

Miners also tracked the broader mood.

Australian shares rise on commodity boost after China eases COVID curbs

The sub-index fell 1.1% on the back of a mixed iron ore futures’ performance on Wednesday. BHP Group, Rio Tinto, and Fortescue Metals all dropped between 0.6% and 1.4%.

New Zealand’s benchmark S&P/NZX 50 index ended the day almost flat at 11,538.45 points.