News: XEJ Australia shares tumble to 3-week low as resources struggle; NZ flat

Australian shares slipped to their lowest in three weeks on Tuesday after the long Easter weekend, as miners struggled on worries about a growing glut, while profit-taking in crude oil hurt energy stocks.

The S&P/ASX 200 index (xjo) fell 64.35 points, or 1.09 percent, to 5,826.4 by 0301 GMT.

Iron ore and steel prices in China, Australia's major trading partner extended falls on Monday after data showed that Chinese mills churned out a record tonnage of steel in March, fuelling concerns about a growing glut. [IRONORE/]

Worries about the glut offset robust China GDP data, which showed the world's second-largest economy grew slightly faster than expectations in the first quarter.

Meanwhile, Australian energy shares took a beating after crude prices slipped 1 percent on Monday, on news of rising U.S. shale production and profit-taking following three straight weeks of gains. [O/R]

"The market is responding to the speed and size of decline in iron ore prices which has unsettled investors and there's also a bit of profit-taking in the energy sector," said Ric Spooner, chief market strategist at CMC Markets. "I think the oil market is beginning to look a little nervous having peaked last week."

The benchmark Australian metal index .AXMM fell to a three-week low with large-cap iron ore miners BHP Billiton (BHP) and Rio Tinto (RIO) shedding more than 1 percent. Shares of Fortescue Metals Group Ltd (FMG) hit its worst level in five months.

Gold stocks also traded in the red as prices of the yellow metal slipped, dragging the gold index .AXGD more than three percent lower. [GOL/] Shares of Newcrest Mining Ltd (NCM) hit a two-week low after the miner temporarily suspended its operations at its Cadia mine following a seismic event.

Oil majors lost heavily with shares of Woodside Petroleum Ltd (WPL) dipping 0.8 percent, while peer Santos Ltd (STO) shed 3.4 percent. The benchmark energy index .AXEJ dropped nearly 2 percent.

Financials, the biggest index constituent was sold off with the 'Big Four' banks trading in the red. Westpac Banking Corp (WBC) and National Australia Bank (NAB) fell more than 1 percent.

"The market is waking up to the fact that the recent optimism in financials was mainly due to the U.S. deregulation and the recovering U.S. economy. Neither of these factors are going to flow through to Australia. It is very clear that the local housing bubble will burst…the question is will it be fast or slow," said Mathan Somasundaram, market portfolio strategist at Blue Ocean Equities.

Minutes from the Australian central bank's April meeting showed board members saw greater risks in the housing market as borrowing for investment fuelled breakneck price rises in Sydney and Melbourne.

The Reserve Bank of Australia's angst over housing has convinced financial markets there will be no more cuts in interest rates despite weakness in the labour market.

New Zealand's benchmark S&P/NZX 50 index (nz50) was flat at 7,226.36 at 0308 GMT.

Financials and healthcare stocks were among the top losers. Australia and New Zealand Banking Group (ANZ) lost 1.01 percent, while Ryman Healthcare Ltd (RYM) shed 1.2 percent.