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Australia shares drop to 3-week low on trade tensions; NZ falls
[BENGALURU] Australian shares closed near a three-week low on Monday after US President Donald Trump's threat to raise tariffs on Chinese goods spoiled hopes for an imminent trade deal between the world's largest economies.
Mr Trump's unexpected tweet on Sunday prompted investors to abandon equities across Asia and sent them scurrying to safe-haven assets such as the Japanese yen and gold.
Broad-based losses pushed the S&P/ASX 200 index 0.8 per cent, or 52.1 points, lower to 6,283.70 at the close of trade. The benchmark was little changed on Friday.
"Arguably, Trump's threat to lift tariffs 'shortly' if Beijing does not play ball on US trade demands, may be more a negotiation tactic than an imminent trade action," said Vishnu Varathan, senior economist at Mizuho Bank in a note.
Markets had seen signs of improving ties between both sides in recent weeks and were hoping for a quick resolution to the bitter tussle that has slowed global growth, hurt export-reliant economies and disturbed global supply chains.
Financials dominated the losses Down Under as they dropped to a near two-week low.
No 2 lender Westpac Banking Corp weakened to an almost three-week trough after it posted its lowest half-year profit since 2013, and was among the top drags on the benchmark.
Miners, whose biggest export market is China, also underpinned the bearish sentiment. The metals and mining index closed at its lowest since Feb 8.
BHP Group Ltd, the country's biggest-listed company, slid to a near two-month low, while shares of rival Rio Tinto ended at their lowest since March 26.
However, gold miners gleamed as investors sought more conservative assets. Regis Resources Ltd strengthened 2.5 per cent and was among the performers on the benchmark.
Across the Tasman sea, New Zealand's benchmark S&P/NZX 50 index slumped about 1 per cent, or 97.46 points, to finish the session at 9,960.62.
New Zealand-listed shares of Westpac dropped to a three-week trough and accounted for most of the losses.