* Sino-U.S trade tensions weight sentiment
* Weak China data adds to investor worries
* Metals and mining stocks buck trend
*
By Aby Jose Koilparambil
Dec 10 (Reuters) - Australian shares fell sharply near two-year lows on Monday, tracking a global sell-off in riskier assets on mounting worries about slowing global growth and Sino-U.S. trade tensions.
Concerns over the trade dispute between U.S and China and interest rates gave European shares their worst week of losses in two months and sank U.S. stocks on Friday.
The S&P/ASX 200 index .AXJO fell as much as 1.9 percent in early trade to its lowest level since December 2016, before trimming some losses to trade 97.3 points down at 5,584.20 by 0037 GMT.
Worries over Sino-U.S tensions flared last week on news that China's Huawei Technologies Co Ltd's HWT.UL chief financial officer had been arrested in Canada, at Washington's behest.
The arrest came as the U.S. and China started 90 days of negotiations that will determine if they can step back from a bruising trade war.
China on Sunday demanded United States should withdraw the arrest warrant on Huawei global CFO Meng Wanzhou, who faces extradition to the U.S., which alleges that she covered up her company's links to a firm that tried to sell equipment to Iran despite sanctions. U.S. job data on Friday and the Huawei arrest have kept the markets jittery, said Caleb Weng, research analyst at Australian Stock Report.
Almost all the major sector indexes were trading in the red, with only the metals and mining index .AXMM and the gold index .AXGD logging in gains.
Australia's top lenders - the 'Big Four' - were all trading lower with Commonwealth Bank of Australia CBA.AX falling as much as 2.90 percent to a near three-week low, while Australia and New Zealand Bank ANZ.AX fell as much as 3 percent.
The Westpac Banking Corp WBC.AX and National Australia Bank NAB.AX slid down as much as 3.2 percent and 2.4 percent, respectively.
The energy index .AXEJ fell up to 1.6 percent to a near nine-month low with WorleyParsons Ltd WOR.AX losing more than 4 percent to become the top percentage loser on the index.
Healthcare and technology stocks, both having high exposure to the U.S. markets, too felt the heat.
The Aussie healthcare bellwether CSL Ltd CSL.AX lost as much as 3 percent in early trade, while online payments firm Afterpay Touch Group Ltd APT.AX topped the percentage losers among technology shares, slipping up to 6.5 percent.
Also dampening investor sentiment, China reported far weaker than expected November exports and imports, showing slower global and domestic demand and raising the possibility authorities will take more measures to keep the country's growth rate from slipping too much. exports only rose 5.4 percent from a year earlier, Chinese customs data showed on Saturday, the weakest performance since a 3 percent contraction in March, and well short of the 10 percent forecast in a Reuters poll.
China is Australia's No. 1 trade partner and any slackness in the world's second largest economy will be felt heavily Down Under.
The metals and mining stocks, however, bucked the trend, gaining as much as 1.4 percent. Index heavyweight BHP Group BHP.AX advanced up to 2.2 percent while another major Rio Tinto (LON:RIO) Ltd RIO.AX gained as much as 0.8 percent.
"The metal index has come off signicantly within the last quarter and a little bit of noise and recovery was on table," said Weng attributing the gains to short covering by investors.
Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index .NZ50 wasn't spared as the index fell 0.8 percent or 72.2 points to 8,695.17.
Diary giant a2 Milk Co ATM.NZ was the top percentage loser, falling as much as about 5 percent.