Australia have suffered a spin-induced loss to New Zealand in Dharamsala, leaving their World Twenty20 hopes hanging by a thread.

Steve Smith’s side did well to restrict NZ to a total of 8-142 following a quick-fire 39 from opener Martin Guptill, who powered his team to 0-58 after six overs.

Australia’s response was initially convincing, especially when Usman Khawaja was at the crease.

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But momentum shifted in a collapse of 4-22 and they finished 9-134 in the eight-run defeat.

Khawaja, who was chosen to open ahead of Aaron Finch and top-scored with 38, was run out in the ninth over attempting a second run that was never there.

The result leaves Australia with a mountain of work to do if they’re to reach the semi-finals of a tournament they have never won.

Smith’s team next faces Bangladesh in Bengaluru on Monday before taking on Pakistan and India.

They will need at least two wins to progress to the knockout stage, possibly three given only two sides from the pool will advance.

Facing, and scoring off, spin remains a major concern for coach Darren Lehmann.

Left-arm paceman Mitchell McClenaghan grabbed three wickets but Australia’s middle order was spun out by Ish Sodhi and Mitchell Santner.

Santner, man of the match in NZ’s tournament-opening win over title favourites India, again turned the tide.

Smith was stumped, bamboozled by a beautiful ball from Santner that turned sharply.

The left-arm tweaker then removed David Warner, who gave Guptill a regulation catch at deep mid-wicket.

Legspinner Sodhi finished with figures of 1-14 from his four overs.

Mitch Marsh clubbed a pair of sixes off Santner to give his side genuine hope of snatching victory; they needed 27 runs off the final three overs.

But Marsh fell for 24 trying to clear the rope and the equation was 19 runs off the final over, something that proved too immense for even James ‘The Finisher’ Faulkner.

It never looked like being so tight, let alone going NZ’s way during a 44-run opening stand from Khawaja and Shane Watson.

Khawaja flicked his wrists to pick the gaps with ease and stroked six well-timed boundaries.

Watson’s dismissal, caught by Kane Williamson at mid-off, was the beginning of the end for Australia in the match.

But the veteran allrounder, who finished with figures of 1-22 from four overs, was heavily influential in a creditable fightback.

Guptill teed off after Williamson won the toss, only for a collapse of 3-15 to follow soon after.

Guptill, Williamson and Corey Anderson all picked out fielders in the deep.

Offspinning allrounder Glenn Maxwell grabbed two wickets, held two catches and ran out Santner.

The highlight of Guptill’s knock – or lowlight for Australia’s recalled left-arm tweaker Ashton Agar – came in the third over.

Smith vowed pre-match he wanted to keep the opposition guessing and the sight of Agar bowling so early was certainly a surprise.

The experiment ended then and there; Guptill cracked three sixes and Agar didn’t bowl another over in the match.

– AAP