Warhorse Glenn McGrath rose to the challenge of a rare trans-Tasman streetfight by 'reversing' the ball and Australia's fortunes in a tight first Test.

In a superb spell of old-ball bowling, McGrath bamboozled New Zealand with reverse swing to take 6-40 in 60 balls and send it plummeting from the dizzy heights of 4-355 to 433 all out at Jade Stadium.

The 35-year-old, battling an abdominal strain overnight, finished with 6-115 from 42 overs to close in on his long-time career goal of 500 Test scalps.

With captain Ricky Ponting (41 not out) holding the fort, Australia then moved to 3-141 to leave the match evenly poised at stumps on day two.

The world champions could have been under more pressure if not for a controversial third umpire's decision to allow Matthew Hayden to remain when he appeared to be caught on eight before tea.

Hayden had pulled a short ball from Chris Martin to the left of square-leg fielder Craig Cumming who claimed a diving left-handed catch low down.

The entire NZ side celebrated but the opener stood his ground before being given the benefit of the doubt by third umpire Tony Hill after several slow-motion replays.

Hayden later fell for 35 to waste a start just like opening partner Justin Langer (23).

Damien Martyn also failed to convert but was unlucky to be adjudged lbw by David Shepherd to a Daniel Vettori delivery that cannoned off his inside edge onto his pad.

Resuming at 3-265, the Black Caps again dominated the early play to move to 3-330 before Shane Warne struck with a ripping leg-break that fizzed out of the footmarks to bowl century-maker Hamish Marshall between his legs.

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