News: XEJ Australian shares end lower as China's fresh COVID woes weigh

• All commodity stocks slump over 5%
• So-called "big four" banks gain between 1.2% and 2%
• Miners hit lowest level since November 2021

(Updates to close)

Australian shares closed lower on Wednesday as fears of COVID-19 lockdowns in China hit commodity stocks, adding to worries of a global recession.

The S&P/ASX 200 index (xjo) ended 0.5% lower at 6,594.50 points, after having risen 0.3% on Tuesday.

A fresh round of COVID-19 testing in Shanghai, China's most populous city, sparked concerns over further lockdowns in the country — the world's top steel producer.

That brought down the metals and mining index .AXMM 5.6%. The big three miners, Rio Tinto (RIO) , BHP Group (BHP) and Fortescue Metals (FMG) fell between 4.6% and 7.2%

"Hopes of demand recovery in China are fading out, leading to a sell-off in commodity prices," said Kunal Sawhney, Chief Executive of Kalkine Group.

The energy index .AXEJ fell 5.8% as oil prices tumbled 9% overnight.

Index heavyweights Whitehaven Coal (WHC) and Woodside Energy (WDS) slid 3.7% and 6.9%, respectively.

Domestic gold stocks .AXGD declined 5.3%, tracking a dip in bullion prices overnight.

Northern Star Resources (NST) and Newcrest Mining (NCM) slumped 3.6% and 6.5%, respectively. However, tech stocks .AXIJ added 3.1% and financials .AXFJ 0.9%, helping limit the losses.

"Today's fall in Australian government bond yields boded well for tech and other growth stocks, which helped trim losses," Sawhney said.

Yields on 10-year bonds AU10YT=RR stood at 3.447%, far below their June peak of 4.125%.

Three of the four major lenders, CBA (CBA) , ANZ (ANZ) and NAB (NAB) raised their home loan variable interest rates by 50 basis points a year, following the central bank's move to raise cash rate by half-percentage point.

New Zealand's benchmark S&P/NZX 50 index (nz50) closed 1.6% higher at 11,141.07 points.