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Australian shares weighed by trade worries; focus on RBA decision

Published 03/06/2019, 12:22 pm
Updated 03/06/2019, 12:30 pm
© Reuters.  Australian shares weighed by trade worries; focus on RBA decision
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* Banks, resource stocks claim bulk of losses on ASX

* RBA rate meeting, AU GDP due later this week

* Gold stocks enjoy safe-haven appeal to hit over 7-year peak

By Devika Syamnath

June 3 (Reuters) - Australian shares weakened on Monday, tracking the broader selloff in global markets as worries about the U.S.-Sino trade war shook investor confidence, weighing on commodities and financials stocks.

Australia's S&P/ASX 200 index .AXJO was 0.7%, or 45.6 points, lower at 6,351.3 by 0153 GMT. The benchmark lost nearly 1% last week.

Defying the selloff, gold stocks .AXGD rallied as their safe-haven appeal brightened against the gloomy global backdrop, sending the sub-index to its best level in over seven years.

"Trade wars and tariffs rattle markets as we await a big week of data," said Greg McKenna, founder of Sydney-based financial advisory firm McKenna Macro, in a note.

In a recent development, Chinese Vice Commerce Minister Wang Shouwen, speaking at the unveiling of a new government policy paper on trade, said Beijing should not be blamed for a decline in U.S. manufacturing jobs. Chinese Trade White Paper ... suggests that China is in no mood to back down in the face of attempts it sees as the U.S. trying to bully it into changing its system of governance," McKenna added.

Investors will closely watch the Reserve Bank of Australia (RBA) decision on Tuesday, at which the central bank is expected to cut rates, and economic growth data later this week.

Prices of commodities such as iron ore and copper, among Australia's top exports, came under pressure as global growth concerns raised doubts about the demand for resources. IRONORE/ MET/L

This weighed on local mining .AXMM and energy .AXEJ markets. The latter lost as much as 2% to touch its worst in over four months.

Oil and gas players Santos Ltd STO.AX , Woodside Petroleum Ltd WPL.AX and Oil Search Ltd OSH.AX gave up between 2.4% and 2.6%, while global mining majors BHP Group Ltd BHP.AX and Rio Tinto (LON:RIO) Ltd RIO.AX were also 1.8% lower, each.

Financial stocks .AXFJ , which boast the highest weightage on the main index, were set for their fourth straight session of declines and lost a much as 0.9%.

The "Big Four" banks fell between 0.6% and 1.3%.

Gold miner Newcrest Mining Ltd NCM.AX notched up as much as 3.9% to its highest since 2012, alongside peers such as Evolution Mining Ltd EVN.AX and St Barbara Ltd SBM.AX which also gained between 3.4% and 5.5%.

New Zealand's stock market .NZ50 was closed on Monday for a public holiday.

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