Australia: Shares sink over 2% as Sino-US trade war escalates

[BENGALURU] Australian stocks tumbled 2.4 per cent on Tuesday and looked set for their worst day over a year as the rapidly escalating Sino-US trade dispute prompted investors worldwide to dump riskier assets.

Washington designated Beijing a currency manipulator following an unexpectedly sharp drop in the yuan on Monday, setting off further falls for battered global stocks.

Australia's benchmark S&P/ASX 200 index slumped 158.1 points to 6,482.2 by 0202 GMT. It has lost about 2.5 per cent since last Thursday when U.S. President Donald Trump abruptly said the US would slap 10 per cent tariffs on US$300 billion of Chinese goods.

China is Australia's biggest export customer.

"There are two words to describe market sentiment right now - panic and fear," said BK Asset Management in a note.

"The promise of global central bank easing is not enough of a reason to buy into this weakness and we will likely see the Asian indexes extend their respective slides into bear-market territory," said Oanda in a note to clients.

Australia's mining and energy indexes gave up as much as 1.7 per cent and 4.2 per cent, respectively.

Mining major BHP Group declined as much as 3.1 per cent to its weakest in over two months, while Fortescue Metals Group lost up to 7.1 per cent.

However, rare earths miner Lynas Corp jumped as much as 7.1 per cent and was among the top gainers on the benchmark. Its Malaysian rare earths processing plant's license is set to be extended, sources told Reuters.

Rare earths have been in focus since reports that suggested the minerals could be brought into the U.S.-China trade war. China is a major global supplier.

Oil and gas company Santos Ltd fell to its lowest level in over five months, while bigger rival Woodside Petroleum hit an over seven-month low.

Heavyweight financial stocks also weakened, with the "big four" banks down as much as 2.5 per cent-3.4 per cent.

Tech stocks were the biggest percentage decliners, with data solutions provider Appen down as much as 3.4 per cent.

Gold stocks were the lone gainers as wider market turmoil raised the metal's safe-haven appeal. Newcrest Mining gained as much as 3.2 per cent to scale a near eight-year peak.

In New Zealand, the benchmark S&P/NZX 50 index dropped 2 per cent to 10,549.52 at 0200 GMT.

Electronic payment platform Pushpay Holdings lost the most on the benchmark and hit an over four-month low.

REUTERS