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Australia: Shares follow global market down as trade worries bite; New Zealand falls


[BENGALURU] Australian shares eased on Wednesday, in line with global peers again focused on threats to economic growth from a prolonged trade row between Washington and Beijing.

The S&P/ASX 200 index traded down 0.8 per cent, or 48.9 points, to 6,435.9. The benchmark closed 0.5 per cent higher in the previous session.

"Negative international leads have produced opening pressure for Asia Pacific markets ... in particular the fall that we saw for blue chip stocks in the US," said Michael McCarthy, chief market strategist at CMC Markets.

"But positive moves in China stocks could see optimism return to trading today," he added.

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Australia, with strong ties to both the United States and China, which is the biggest buyer of its resource-focused exports, is particularly exposed to developments in the trade war between the two economic super powers.

Resource stocks bore the brunt of the fall and not even a rally in iron ore prices could hold back mining stocks from the red.

Rio Tinto fell as much as 1.5 per cent, slipping from a near 11-year high reached on Tuesday. The world's biggest miner BHP Group Ltd also eased, dipping 1.1 per cent.

The S&P/ASX energy index lost more than 1.6 per cent.

"Fluctuations in oil prices are being exaggerated by local traders in energy stocks today," said Mr McCarthy.

US crude futures gained almost 1 per cent on Tuesday after flooding throughout the Midwest constrained crude flow from a US storage hub but later erased gains, succumbing to the same Sino-US trade war concerns.

Oil and gas players Santos and Origin Energy fell 2.7 per cent and 3 per cent respectively. Oil Search declined for a fifth session, hurt by political disarray in Papua New Guinea that threatens to delay a project in which it is a partner.

"Perhaps gold is the next participant in what is clearly a global shift towards more capital stable products and more safe havens," said Mr McCarthy.

The gold miners' index managed to stay in the black, gaining as much as 0.8 per cent, with top miner Newcrest Mining eking out a 0.4 per cent gain.

In yet another development in the telecom sector this week, Telstra Corp shares rose as much as 0.8 per cent as investors eyed progress of their strategic reset, overlooking a A$500 million writedown and higher restructuring costs.

New Zealand's benchmark S&P/NZX 50 index fell 0.7 per cent to 10,052.59 by 0146 GMT, with financial stocks leading the decline.

Local shares of Westpac Banking Corp lost as much as 1.3 per cent.

Builder Fletcher Building fell as much as 4.4 per cent after Precinct Properties New Zealand said it had to push back opening dates for some construction projects due to a delay by its main contractor, a unit of Fletcher.