Australia 124 for 4 (Labuschagne 45*, Lyon 1*) trail New Zealand 162 (Latham 38, Hazlewood 5-31, Starc 3-59) by 38 runs

Mitchell Starc overtook Dennis Lillee's famous landmark with his 356th Test wicket and Josh Hazlewood produced a standout performance before Matt Henry led a New Zealand fightback late on the opening day of the second Test at Hagley Oval.

After New Zealand were dismissed for their lowest total in Christchurch, Henry claimed the wickets of Usman Khawaja, Cameron Green and Travis Head as Australia reached stumps at 124 for 4 and trail by 38 runs.

Marnus Labuschagne, in his 50th Test, shrugged off a form slump to hold firm with 45 not out to ensure Australia had the upper hand as they seek to clinch the series 2-0 following their decisive victory in Wellington. Nathan Lyon survived the last passage of play as the nightwatcher.

But the late efforts of Henry kept New Zealand afloat. Having watched Hazlewood star with immaculate line and length bowling in his five-wicket haul, Henry responded with menacing swing and well-executed plans highlighted by a spectacular delivery to get through the defences of first Test centurion Green.

Debutant Ben Sears provided New Zealand with the initial spark when he dismissed Steven Smith lbw on his third delivery in Test cricket after coming into the attack in the ninth over as the first change bowler.

In a complete misjudgement, Smith was struck on the pads after shouldering arms with his disappointment obvious when he reviewed unsuccessfully with the decision upheld in an umpire's call.

Despite losing Head to a rash stroke just before stumps, Australia still finished the day's play in control after Hazlewood and Starc combined for eight wickets as New Zealand capitulated for their third straight innings under 200 runs.

Pat Cummins' decision to bowl first was rewarded on a green-tinged surface that conjured seam movement although conditions did not appear as treacherous as in Wellington.

Six bowlers were used as New Zealand were bowled out for 162 by tea. It was a disastrous batting performance from New Zealand, who at one point lost 8 for 60 in a horrid start to a momentous match amid the 100-Test milestones of Kane Williamson and Tim Southee.

New Zealand let slip a solid start after Tom Latham and Will Young thwarted the new ball in a 47-run opening partnership

Latham had scored only 202 runs at 16.83 in his last 12 Test innings, but he looked assured from the get go and played fluently in contrast to Young, who endured a torrid time against Hazlewood and Cummins.

Cummins - in the 12th over - reverted to Lyon, fresh off his 10-wicket haul on the spin-friendly Basin Reserve surface. But spin has traditionally not been conducive at Hagley Oval with Lyon's entry into the attack being the earliest by a spinner ever at the ground.

Latham made a statement by sweeping the first ball to the boundary and there was little spin on offer for Lyon, who bowled only two overs in the innings.

Australia faced a wicketless first session until Starc returned and in the 19th over ended Young's scratchy innings after Mitchell Marsh completed a tough low catch at third slip to trigger New Zealand's collapse.

It was the 29th time Australia had chosen to bowl first in Tests since 1998, but only twice had they taken longer to take a wicket.

Australia quickly gained the upper hand by lunch when Hazlewood dismissed Latham and Rachin Ravindra who edged to slip after attempting a loose drive. Ravindra threw his head back and trudged off in despair as New Zealand nosedived further after the interval.

Given New Zealand's familair predicament, Daryl Mitchell was again unable to play aggressively before being undone by another gem of a delivery from Hazlewood to be caught behind.

Having entered to a standing ovation, Williamson had been determined to make amends for a horror first Test, where he had a rare double-failure. He pounced on rare loose deliveries from Cummins before being trapped lbw on 17 by a Hazlewood ball that angled back as Williamson forlornly reviewed.

In comparison to Hazlewood, Starc struggled with his consistency and proved expensive until he had Glenn Phillips caught behind down the leg side in a dismissal that moved him past Lillee's tally and into fourth on Australia's all-time wicket-taking list.

Starc was on a roll when he had Scott Kuggeleijn lbw first ball after delivering a piercing trademark yorker that struck him on the foot as New Zealand's long-time woes against Australia continued.

New Zealand, having only beaten Australia twice from 36 Test matches since 1993, stuck with a seam-heavy attack with Sears replacing injured quick Will O'Rourke, while left-arm spinner Mitchell Santner was overlooked again.

Australia fielded an unchanged side for the fourth Test in a row and the same bowling quartet for the seventh consecutive match.

Retiring umpire Marais Erasmus received a guard of honour from the players before play.