By Susan Mathew
April 6 (Reuters) - Australia shares fell on Friday as worries over an all-out trade war between the U.S. and China deepened after U.S. President Donald Trump proposed additional tariffs on China.
Trump on Thursday instructed U.S. trade officials to consider $100 billion in additional tariffs on China "in light of China's unfair retaliation" against earlier U.S. tariffs. MKTS/GLOB
Beijing had swiftly responded to the proposed 25 percent tariff on Chinese goods by proposing a $50 billion tariff on American imports.
The S&P/ASX 200 index .AXJO was 0.02 percent, or 1.4 points, lower at 5,787.4 by 0231 GMT, on-track to log a weekly gain, snapping three straight weeks of losses.
The benchmark had risen 0.5 percent on Thursday when investors responded to signs of easing in tensions after Washington expressed willingness to negotiate with China.
Michael McCarthy, chief marketing strategist at CMC Markets, said a combination of factors were affecting markets on Friday.
"I think the remarks from President Donald Trump that he's imposing tariffs on another $100 billion worth of goods might have cooled the sentiment, but we've also got some pressure coming from the commodity side of things."
The biggest drags on the index were Commonwealth Bank of Australia CBA.AX , declining 0.5 percent, and healthcare stock CSL Ltd CSL.AX , down 0.6 percent.
Material stocks BHP BHP.AX and Rio Tinto (LON:RIO) RIO.AX were down 0.6 percent and 0.1 percent, respectively.
On the ASX All Ordinaries index .AORD , Blue Sky Alternative Investments BLA.AX was the worst performer, down 10 percent, hitting a more than two-year low.
Blue Sky Alternative's stock has halved in value since March 28, when short-seller Glaucus Research Group claimed Blue Sky had overstated its size, exaggerated performance and over-valued assets. stocks, however, gained on rising oil prices. Woodside Petroleum WPL.AX was up 0.8 percent and was among the biggest boosts to the index. O/R
Real estate stocks also saw some buying with Westfield Corp WFD.AX and Scentre Group SCG.AX rising 1.3 percent and 0.4 percent, respectively.
"I think it's just a reflection of the fact that property stocks have been under extreme pressures of late. We have seen interest rate expectations moderate over the last few sessions… the buying that we are seeing in the market today is largely bargain hunting," McCarthy added.
New Zealand's benchmark S&P/NZX 50 index .NZ50 rose 0.3 percent, or 22.48 points, to 8,386.47, helped by gains in construction firm Fletcher Building FBU.NZ and Meridian Energy MEL.NZ .
Fletcher was up 1.4 percent, while Meridian gained 0.7 percent.
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