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Australia, NZ shares end lower on fears of a long U.S.-China trade war

Published 24/05/2019, 04:59 pm
© Reuters.  Australia, NZ shares end lower on fears of a long U.S.-China trade war
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* Aussie index has 1.4% weekly gain, best since late April

* Financials index +6.1% this week, biggest gain since early Feb (Updates to close)

May 24 (Reuters) - Australian shares ended lower on Friday, dragged down by financials and energy stocks as more investors price in the possibility of a protracted Sino-U.S. trade war.

Despite Friday's losses, the S&P/ASX 200 index .AXJO notched a weekly gain of 1.4%, its best performance in four weeks. The advance stems largely from optimism after Prime Minister Scott Morrison surprisingly won Australia's May 18 election.

On Friday, the benchmark index slid 35.80 points or 0.6% lower to close at 6,456.0.

Worries over Sino-U.S. trade tensions kept global markets subdued through the week, with investors anxious about the possible impact on the global economy of a long trade war.

U.S. President Donald Trump said on Thursday that Washington's complaints against Huawei Technologies HWT.UL might be resolved within the framework of a U.S.-China trade deal, while at the same time calling the Chinese telecommunications giant "very dangerous." McKenna, founder of Sydney-based financial advisory firm McKenna Macro, said in a note "We have had a narrative shift as traders and investors have woken to the notion that the trade war is becoming intractable and hegemonic."

The financials sub-index .AXFJ , after paring losses, ended down 0.5% Australia and New Zealand Banking Group ANZ.AX shed 0.4% and Westpac Banking Corp WBC.AX slipped 0.1 %.

Commonwealth Bank of Australia CBA.AX , the biggest lender, erased losses to end flat.

Financial stocks notched a weekly gain of 6.1% - their best week since Feb. 4-8, thanks to a near 8% advance on Monday and Tuesday combined.

Energy stocks .AXEJ plunged 3.1% after oil prices fell sharply as trade tensions hit the demand outlook. The sub-index posted a weekly loss of about 4.3%, its worst performance since late December.

Woodside Petroleum WPL.AX dropped 3.5% and Santos STO.AX lost 3.2%.

Miners .AXMM also declined, and had a weekly loss of 1.9%, despite record high iron ore prices for most of the week.

Benefiting from increasing tensions were gold stocks .AXGD which rose 0.3%. Northern Star Resources NST.AX climbed 1%.

New Zealand's benchmark S&P/NZX 50 index .NZ50 fell 0.4% or 41.05 points to 10,222.36, but notched a weekly gain of 0.4%.

Diary giant a2 Milk Company ATM.NZ fell 1.6% while Synlait Milk SML.NZ shed 1.1%.

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