News: XIJ Australia shares end flat as major banks weigh

• Platinum Asset Management top loser on ASX
• Major banks wiped early gains on ASX
• NZX 50 up 0.2%

(Updates to close)

Australian shares closed flat on Tuesday, as major banks capped the advances made by heavyweight miners, with the possibility of a coronavirus-led lockdown being extended in the country's largest city still left open.

The S&P/ASX 200 index (xjo) fell 0.02% to 7,332.1 points, surrendering an early lead to finish narrowly in the red.

Australia reported a slight easing in new COVID-19 cases in Sydney on Tuesday, but the possibility of a lockdown extension still looms, with growing fears that the outbreak was showing early signs of spreading further afield.

"The market had sort of assimilated the implications of the coronavirus-related lockdowns and showed tiny hints this week of moving on," Henry Jennings, a senior analyst for independent stock market newsletter Marcus Today said.

"However, the possibility of extending a lockdown in Sydney has wiped off the early gains on the local bourse, especially the financial stocks, and has cut down on today's risk appetite."

The heavyweight financial index .AXFJ closed 0.4% lower, with Australia's biggest lender Commonwealth Bank of Australia (CBA) and second-largest lender Westpac (WBC) skidding up to 0.8% and 0.5%, respectively.

Energy stocks .AXEJ closed 0.6% lower even as oil prices climbed overnight.

Sector heavyweights, Whitehaven Coal Ltd (WHC) tumbled 2.68%, followed by Woodside Petroleum Ltd (WPL) , losing 1.34%.

In contrast, Australian mining stocks .AXMM closed 0.04% higher with iron ore advancing more than 3% as lingering concerns about a tight supply of the steelmaking raw material eclipsed expectations of a slowdown in China's steel demand.

The country's heavyweight miners, Rio Tinto (RIO) and Fortescue Metals (FMG) advanced as much as 1.6% and 2.6%, respectively.

The top percentage loser on the local bourse was fund manager Platinum Asset Management Ltd (PTM) , down 8.26% after its monthly funds under management (FUM) dropped.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index (nz50) rose 0.2% to 12784.9.