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Australia: Shares drop on fresh global trade concerns; NZ down
[BENGALURU] Australian shares posted their biggest intraday percentage loss in two months on Tuesday, as investor appetite was hit after US President Donald Trump said he would restore import tariffs on steel from Brazil and Argentina.
Mr Trump's move is the latest sign that the trade disputes between the US and its trading partners could continue to roil markets and fuel global growth concerns.
The US has been locked in a bitter trade tussle with China, Australia's top trade partner, for nearly one-and-a-half years now, with global markets turning volatile with regard to any trade talks progress or lack of it.
The S&P/ASX 200 index fell about 2 per cent to 6,725.80 by 0023 GMT. The benchmark had finished 0.2 per cent higher on Monday, having gained in six of the last seven sessions on optimism that the Sino-US trade war was drawing to a close.
On Monday, Mr Trump targeted the two Latin American nations, announcing restoration of tariffs on US steel and aluminium imports from the those countries in retaliation for currency weakness he said was hurting US farmers.
Denting sentiment further, the US said it could increase retaliatory tariffs on a wider range of European goods after the World Trade Organization rejected European Union claims that it no longer provides subsidies to planemaker Airbus.
"Whenever markets approach previous all-time highs, investors get nervous and they worry about whether the markets would be trading at these high levels... And, then what we need is a just a trigger and that came in the form of weak US manufacturing data and tariff imposition on Brazilian and Argentinian steel," said Christopher Conway, senior investment adviser at Marcus Today Financial Newsletter.
All sector-based sub-indexes on the Australian benchmark were trading lower, with technology and consumer stocks bleeding the most, posting an over 2 per cent decline each.
The heavyweight financials fell sharply with all the Big Four banks losing between 1.2 per cent and 1.7 per cent.
In the metals and mining space, gold stocks dragged the sub-index down 1.7 per cent, while diversified players BHP Group and Rio Tinto slipped about 1.8 per cent and 1.4 per cent, respectively.
Healthcare stocks, which had risen along with finance stocks in the previous session, shed around 1.8 per cent with medical technology firm Avita Medical topping the percentage losers on the benchmark.
Australia's No 2 independent gas producer Santos Ltd was one among the few stocks in the green, gaining as much as 1 per cent after it upgraded its 2025 production outlook, indicating a cumulative annual growth rate of more than 8 per cent.
Meanwhile, investors await the monetary policy decision, due later in the day, with a further cut to record low rates expected only early next year.
New Zealand's benchmark S&P/NZX 50 index fell 0.4 per cent to 11,255.79, with healthcare firm Fisher & Paykel Healthcare and dairy firm a2Milk slipping 3 per cent and 2.5 per cent, respectively.