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Australia shares fall as Trump's Latin America tariffs create trade anxiety

Published 03/12/2019, 05:01 pm
Updated 03/12/2019, 05:07 pm
© Reuters.  Australia shares fall as Trump's Latin America tariffs create trade anxiety
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* All sub-indexes of Australian benchmark end lower

* Avita Medical among top gainers on benchmark

* NZ market closes lower (Updates to close)

By Nikhil Subba

Dec 3 (Reuters) - Australian shares posted their biggest daily fall in two months on Tuesday after U.S. President Donald Trump's surprise move to restore tariffs on imports from Brazil and Argentina.

The S&P/ASX 200 index .AXJO fell 2.2% to 6,712.3 at the close of trade, as Trump's move reignited worries about global trade and the future of Sino-U.S. trade talks in particular. The benchmark had ended 0.2% firmer on Monday.

Trump, in a tweet on Monday, said he would restore tariffs on U.S. steel and aluminum imports from the two Latin American countries, attacking them of presiding over a massive devaluation of their currencies, which he said was hurting U.S. farmers. move by Trump signals that trade deals with the U.S. are of limited value ... China will be watching this closely and asking itself just how far it wants to go in negotiations with Trump, knowing that a deal could very well be short-lived," ING economist Timme Spakman said in a note to clients.

The United States and China, Australia's top trade partner, have been locked in a bitter trade tussle for nearly one-and-a-half years now, which has been in part responsible for a slowdown in global growth. Any progress in trade talks between the world's two largest economies, or a lack of it continues to sway markets.

All component sub-indexes of the Australian benchmark ended the session in negative territory, with healthcare .AXHJ stocks falling nearly 3% as worst performers.

Drugmaker CSL Ltd CSL.AX , which has a U.S.-based revenue stream, dropped 2.9% at the close to mark its biggest intraday percentage loss since Oct. 3, while regenerative medicine company Avita Medical AVH.AX , which was top loser on the main benchmark, closed about 9.5% lower.

Tech stocks .AXIJ finished 2.7% down at their lowest since Oct 21, pressured by Wisetech Global WTC.AX which closed 5.7% lower, and Nearmap Ltd's NEA.AX near 4% tumble.

The country's largest lender Commonwealth Bank of Australia CBA.AX closed 2.6% lower, and was the top loser among the "Big Four" banks, all of which ended in the red. This pushed financial sector .AXFJ down 2.1% at close.

At close, the mining sub-index .AXMM fell 1.2% in its worst session since Oct. 17, as its components were bruised by a decline in base metals prices.

New Zealand's benchmark S&P/NZX 50 index .NZ50 also slipped 0.7% to finish the session at 11,228.00.

Dairy company A2 Milk Co ATM.NZ fell 3.3% while Synlait Milk SML.NZ ended about 2% lower.

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