The world No.1-ranked Kookaburras have suffered a 2-0 defeat to reigning Olympic champions Argentina in their showdown at the Darwin International Hockey Open.
Argentina, who are ranked second in the world, grabbed the initiative with a quickfire double late in the third quarter at the Marrara Hockey Centre on Wednesday.
Maico Casella fired a drag flick into the backboard from a penalty corner in the 44th minute and soon after the restart Agustin Mazzilli rocketed a shot past goalkeeper Andrew Charter.
The Kookaburras had beaten Argentina 1-0 in a pre-tournament warm-up game on Sunday and the two teams are on track to meet again in Saturday's final of the four nation competition.
Australia, who beat Malaysia 5-2 on Tuesday, now need to beat Japan in their final round round game on Friday to be assured of making the final.
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Argentina are the only unbeaten team after opening their schedule with a 2-1 win over Japan on Tuesday.
In Wednesday's other match Malaysia had to settle for a 3-3 stalemate with Japan, who equalised with a minute to play.
