(Updates to close)
May 9 (Reuters) - Australian shares closed lower on Tuesday, with financials accounting for nearly three-quarters of the losses as the 'Big Four' banks face strong headwinds in the form of a new government inquiry and a possible new levy.
The S&P/ASX 200 index .AXJO declined 0.5 percent, or 30.99 points to 5,839.9 at the close of trade.
There has been political pressure for an inquiry into financial sector malpractice, with the government saying it will look into competition in the financial system, following a series of scandals in the banking sector. was also affected by media speculation that the government intends to impose a transactions tax on institutional lending. financial index .AXFJ slumped more than 2 percent to its lowest in more than six weeks, led by declines in Commonwealth Bank of Australia CBA.AX which had its lowest close in three months.
The declines were not broad-based, however, with eight out of 10 sectors in the black.
New Zealand's benchmark S&P/NZX 50 index .NZ50 slipped 0.2 percent, or 14.34 points to finish the session at 7,412.12.
Materials, utilities and industrials were the biggest drag on the index.
Natural health products maker Comvita Ltd CVT.NZ was the biggest percentage loser, shedding 3.6 percent in its fourth straight day of losses.
The stock has been on a downtrend since the company said last week that it was gathering information about the potential risk of myrtle rust - an airborne fungus affecting plants - arriving in New Zealand.