The Joeys have been beaten in the first match of the AFC U-16 Championships in India, succumbing 1-0 to Kyrgyzstan on Friday.
A penalty to Adilet Kanybekov 15 minutes from the end was the difference in the hard-fought Group B opener at GMC Stadium.
The young Australian’s had the best chance of an even first half, when Louis D’Arrigo was denied by a stunning save from Kyrgyzstan keeper Elgard Sychev.
Tony Vidmar’s side carried that momentum into the second half but were unable to make the most of their possession and few opportunities.
Joel King’s free-kick sailed just over the crossbar while Adrian Viggiani also had a chance but shot narrowly wide.
Kyrgyzstan got more into the contest as time dragged on and then struck the decisive blow when Gulzhigit Borbubaev was brought down in the box for a penalty.
It was left to substitute Kanybekov, who’d only been on the field a matter of minutes to slam home the spot-kick and hand Kyrgyzstan a huge result.
"Obviously, it was very disappointing from our point of view. We were poor in possession and had no intention to go forward as positively as we can,” Joeys boss Vidmar said.
“Defensively we were reactive and that allowed our opponents to play forward and make it difficult for us.
"The way we played was so not our game. We deserved to get nothing from this game, and full credit to our opponents.
"I don't know whether the players were scared of the occasion that can happen. It's a great opportunity for us to be here and take part in this competition."
The other match in group B saw Japan run out convincing 7-0 winners over Vietnam.
Australia's next match is against Vietnam on Monday.
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