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Australia shares fall to near five and a half month low on trade war worries; NZ dives

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[BENGALURU] Australian shares tumbled to a near five and a half month low on Monday, following a sharp fall on Wall Street, as fears about a potential US trade war with China continued to rattle investors.

The S&P/ASX 200 index fell 0.6 per cent or 33.5 points to 5,787.2 by 0042GMT. The benchmark dived about 2 per cent on Friday.

US stocks plunged on Friday as nervous investors tried to minimise losses as fears of a potential trade war mounted.

The gyrations in US markets were on the minds of Australian investors today, said James McGlew, executive director for corporate stockbroking at Perth-based Argonaut.

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"Markets can price risk but they can't price uncertainty, and there is a lot of uncertainty created with regards to these moves with tariffs and trade wars."

Mirroring a fall in US financials, the local financials index slumped by as much as 1.2 per cent to its lowest in more than 16 months.

Banks, which accounted for most of the losses on the benchmark, have also been under pressure from a government-backed Royal Commission enquiry into misconduct by financial institutions.

The country's top banks routinely and repeatedly breached laws when issuing home loans, credit cards and other consumer loans, the first round of hearings was told.

"The Royal Commission is very damaging to sentiment and it would appear that the Commonwealth Bank has the most to answer to so they have already started to move on executive changes," added Mr McGlew.

Commonwealth Bank of Australia slipped 0.5 per cent to its lowest since November 2016 after announcing changes to its senior executive team.

Wealth manager AMP Ltd dipped 1.7 per cent to its lowest since Feb 8. It said chief executive Craig Meller intended to retire around the end of 2018.

Fears of a trade war also hit commodities prices, leading to a weakness in materials stocks, especially miners. BHP, the world's biggest miner, slipped 0.7 per cent, while BlueScope Steel fell about 2 per cent.

However, safe-haven buying led to a rise in gold prices, boosting gold miners. Newcrest Miningclimbed 2.1 per cent to a near two-week high.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index fell 1.2 per cent or 100.3 points to 8,415.06.

Consumer staples and healthcare stocks led the losses, with a2 Milk Company plunging 4 per cent to its lowest in around 2 1/2 weeks. Ryman Healthcare slipped 1.7 per cent.

New Zealand posted a monthly trade surplus in February as the detection of "stink bugs" on four vehicle carriers at local ports and subsequent delays in offloading reduced the total value of vehicle imports, Statistics New Zealand said on Monday.

REUTERS