Australia, NZ shares skid as Huawei's troubles heighten Sino-US trade anxiety

[BENGALURU] Australian shares fell on Tuesday as investors viewed a US move to level criminal charges against China's Huawei as potentially reducing the chance of Washington and Beijing reaching a durable resolution to their trade war.

The S&P/ASX 200 index dropped 0.5 per cent or 31.40 points to 5,874.20 at the close, pulling back from a 0.7 per cent gain on Friday. Markets were shut on Monday for Australia Day.

The United States on Monday announced criminal charges against China's Huawei Technologies Co Ltd, escalating a fight with the world's biggest telecommunications equipment maker. The indictment came as Chinese delegates were already in Washington to prepare for the latest round of trade talks.

Investor sentiment was already shaken after industrial bellweather Caterpillar and chipmaker Nvidia Corp flagged a weaker Chinese demand, igniting fresh fears of a slowdown in Australia's biggest trade partner China. The financial sector slipped 1.7 per cent to a near three-week low and was the biggest drag on the benchmark.

The country's "Big four" banks shed between 1.6 per cent to 2.3 per cent each.

Healthcare stocks also piled pressure on the main index, slumping 2.5 per cent, with CSL Ltd declining 2.3 per cent, and Australia-listed shares of medical devices maker ResMed Inc plunging 10.4 per cent.

Still, sustained strength in Chinese iron ore futures helped to contain broad market losses, pushing the metals and mining index 2.3 per cent higher to a near four-month high.

The world's biggest miner BHP Group gained 2.1 per cent while rival Rio Tinto rose 3.8 per cent.

Teleco Telstra Corp Ltd led gains on the benchmark, rallying 7.8 per cent, after competitor TPG Telecom cancelled plans for a Huawei driven rival mobile network.

Across the Tasman sea, New Zealand's benchmark S&P/NZX 50 index closed 1.2 per cent lower or 108.140 points to finish the session at 9,006.380.

Billing services provider Gentrack group declined 5.2 per cent and was the top per centage loser.

REUTERS