By Krishna V Kurup
Jan 31 (Reuters) - Australian shares lost ground for the second session on Tuesday, extending a global selloff in equity markets after U.S. President Donald Trump's tough immigration policy sapped investor confidence.
Trump's executive order on Friday put a four-month hold on allowing refugees into the United States and temporarily barred travellers from Syria and six other Muslim-majority countries, sparking a backlash in the United States and abroad. Monday, the dollar fell more than 1 percent against the yen, while major U.S. stock indexes posted their largest declines so far in 2017. .N FRX/
It was the biggest daily percentage drop for the Dow .DJI since October, while the S&P .SPX and Nasdaq .IXIC dropped the most since late December.
While global stocks and the U.S. dollar rose in the weeks after Trump's election win in November, on bets fiscally expansionary policies will set U.S. growth on a higher gear, lately markets have been spooked by the new administration's protectionism and tough stance on immigration.
"Late last year and early this year, everyone was excited about the change President Trump might bring," said Christopher Conway, head of research and trading at Australian Stock Report.
"Now the reality of what Trump might mean for people, communities, areas of finance, commerce, international trade is creating volatility."
The S&P/ASX 200 index .AXJO fell 0.7 percent, or 41.92 points to 5,619.60 by 0057 GMT, hurt by big losses in energy, material and financial stocks.
The energy index .AXEJ dropped 2 percent to its lowest in four weeks, with Woodside Petroleum WPL.AX falling 1.7 percent and Oil Search OSH.AX off 1.6 percent.
Australia's top energy retailer, Origin Energy ORG.AX fell 3 percent, even after reporting a 27 percent rise in gas revenue in the December quarter. miners BHP Billiton (LON:BLT) BHP.AX and Rio Tinto (LON:RIO) RIO.AX fell 1.6 and 2.5 percent, respectively.
Shares of rival Fortescue Metals Group FMG.AX bucked the trend, rising as much as 3.7 percent to their highest in seven weeks, after the company said it remains on track for another bumper year. stocks .AXFJ fell 0.7 percent, with the "big four" banks falling 0.7 percent to 1.2 percent.
Safe haven gold stocks gained on the back of weak dollar, supported by political uncertainty in U.S. and Europe. GOL/
Newcrest Mining NCM.AX rose 1.4 percent.
New Zealand's benchmark S&P/NZX 50 index .NZ50 declined 0.7 percent or 48.58 points to 7,036.98, dragged down by consumer and material stocks.
Fletcher Building Ltd FBU.NZ lost 0.9 percent, while Sky Network Television Ltd SKT.NZ was down 2.1 percent.
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