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Australia: Shares tumble as Sino-US trade war heats up

[BENGALURU] Heavy selling of banking shares and iron ore miners pushed Australian shares down more than 1% on Monday, after a dramatic escalation in the US-China trade war threatened to further undermine global economic growth.

The S&P/ASX 200 index ended down 1.3 per cent, or 83 points at 6,440.1, wiping out most of the 1.8 per cent it gained last week.

On Friday, US President Donald Trump announced a 5 per cent additional duty on US$550 billion in targeted goods from China, hours after China unveiled retaliatory tariffs on US$75 billion worth of US products.

China is the biggest buyer of Australia's resource exports, and the escalating trade pressure could further dampen its domestic demand.

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Iron ore is Australia's top revenue-earner and miners of the steel-making material were among the biggest weights on the benchmark index.

Iron ore miners BHP Group, Rio Tinto and Fortescue Metals lost between 2.1 per cent and 5.3 per cent. Rio closed at its weakest in nearly 7 months.

Energy units also tumbled 3.1 per cent, with oil and gas firms Santos and Woodside Petroleum declining 2.5 per cent and 3.7 per cent, respectively.

Australian gold stocks had a field day, surging 6.8 per cent, as wider uncertainty boosted the safe-haven appeal of the yellow metal.

Gold miner Resolute Mining was the top gainer on the benchmark and closed 10.3 per cent higher.

Heavyweight "big four" banks lost between 0.7 per cent and 1.4 per cent.

Australia's largest building materials maker Boral and educational services provider G8 Education led declines on the index, as both flagged weaker annual profit outlook.

New Zealand's benchmark S&P/NZX 50 index closed 1.3 per cent lower at 10,483.47.

Dairy products firm Fonterra Shareholders' Fund led falls on the index, after having lost 4.5 per cent on the day.