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Australian equities slump on U.S. trade tensions with China, Mexico

Published 03/06/2019, 05:22 pm
Updated 03/06/2019, 05:30 pm
© Reuters.  Australian equities slump on U.S. trade tensions with China, Mexico
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* Miners, banks among top losers on ASX

* Focus on expected rate cut from RBA meeting on Tuesday

* Gold stocks, real estate gain on defensive appeal (Updates to close)

June 3 (Reuters) - Australian shares ended over 1% lower on Monday, reflecting investors concerns that U.S. President Donald Trump's aggressive trade diplomacy toward both China and Mexico could tip the United States and other major economies into recession. Reserve Bank of Australia (RBA) is expected to cut its policy rate on Tuesday for the first time in almost three years by reducing the cash rate to a record low 1.25 %. and resources stocks led declines as Australia's S&P/ASX 200 index .AXJO closed 1.2%, or 76.4 points, lower at 6,320.5.

Bullion's safe-haven status helped gold stocks .AXGD surge 3.8%, with the sub-index making its best close since 2012. MKTS/GLOB

Otherwise the trade war worries hit Australian mining stocks, as China is their biggest customer. Mining stocks .AXMM and energy units .AXEJ registered heavy losses, with the sub-indices closing 1.5% and 1.8% lower respectively.

Major mining players BHP Group BHP.AX and Rio Tinto (LON:RIO) RIO.AX lost 2.5% and 3.2%, respectively, while oil and gas heavyweight Woodside Petroleum Ltd WPL.AX finished 2.4% lower.

Lynas Corp LYC.AX lost 5.6% on media reports that suitor Wesfarmers WES.AX would not hike its takeover offer for the rare earths miner, whose shares had surged 54% in May amid speculation that Beijing is planning to restrict supplies of rare earths to gain leverage in its trade war with United States. stocks .AXFJ fell 1.4%, with the "Big Four" of the sector registering losses between 0.6% and 1.3%.

Gold miners such as Newcrest Mining NCM.AX and Evolution Mining EVN.AX both surged over 3.6% and among other defensive plays.

Real estate stocks such as Goodman Group GMG.AX and Mirvac Group MGR.AX also closed 1.4% and 2% higher. Zealand's stock market .NZ50 was closed on Monday for a public holiday.

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