* Australia, New Zealand shares lose more than 1 pct
* BHP biggest drag on Aussie benchmark, posts worst session in 4 weeks.
By Christina Martin
March 23 (Reuters) - Australian shares plunged to their lowest in more than five weeks on Friday, following Wall Street's slide after President Donald Trump signed a memorandum that could impose heavy tariffs on imports from China - sparking fears of a global trade war.
The S&P/ASX 200 index .AXJO fell 1.6 percent, or 96.6 points, to 5,840.6 by 0024 GMT, its lowest since Feb. 14. The benchmark had its biggest intraday percentage loss in six weeks and was on track for a second straight weekly fall.
The presidential memorandum will target up to $60 billion in Chinese goods.
In Australia, materials and financial stocks led the losses on the main index.
"We've got two things playing out: the U.S. Federal Reserve has upgraded the rate cycle, especially for 2019, and the market usually takes a few days to absorb that. Secondly, the tariffs have come through, and the U.S. is flagging that purely against China," said Mathan Somasundaram, market portfolio strategist, Blue Ocean Equities.
"The market will be worried because Australia is pretty much a proxy for global trade, so if there's any kind of trade war, we take the negative side of it. Our currency doesn't have much yield premium and if commodities weaken on trade worries, the currency drops dramatically."
The materials sector .AXMM slid as much as 3.6 percent, falling the most in nearly a year on a drop in commodity prices, with BHP Billiton (LON:BLT) BHP.AX and Rio Tinto (LON:RIO) RIO.AX losing 3.6 percent and 4.4 percent, respectively.
Oil retreated as investors took profits after this week's rally, while copper fell to three-month lows amid a broad slump in base metal prices. O/R MET/L
Financial stocks .AXFJ fell as much as 1.7 percent to their lowest in more than six months, with the 'Big Four' banks slipping between 1.4 percent and 1.8 percent.
Consumer staples and healthcare stocks also contributed to the heavy losses.
Wesfarmers Ltd WES.AX shaved off over 1 percent, while CSL Ltd CSL.AX lost 2 percent.
"Any hit to the economy means there are worries that consumer spending will be reduced. A further hit to the economy means that it's going to get even weaker. Our main discretionary spending is in retail and healthcare so both of them will be hit quite a bit," said Somasundaram.
Meanwhile, New Zealand's benchmark S&P/NZX 50 index .NZ50 edged down 1.2 percent, or 101.17 points, to 8,499.64.
Consumer staples and healthcare stocks dragged the index down, with a2 Milk Company Ltd ATM.NZ and Fisher & Paykel Healthcare Corporation Ltd FPH.NZ shedding 3.6 percent and 1.3 percent, respectively.
The New Zealand benchmark, however, was on track for its third straight weekly gain.