* Material stocks hit three-week low
* Healthcare, industrial stocks help NZ stocks edge higher
By Christina Martin
March 5 (Reuters) - Australian shares edged lower on Monday,as proposed U.S. tariffs on steel and aluminium weighed onmaterials stocks and the prospect of a hung parliament in Italyhit global investor appetite.
U.S. stock futures slipped amid fears of a global trade war,which hit Asian stocks, while the euro was volatile after exitpolls for Italy's elections pointed to a hung parliament.
The S&P/ASX 200 index .AXJO slipped 0.4 percent, or 23points, to 5,905.9 by 0104 GMT. The benchmark closed down 0.7percent on Friday.
"It's a mixture of two factors - trade war fears and apossible hung parliament in Italy both add to the sellingpressure in U.S. futures," said Peter Spanos, volatility riskmanager at CMC Markets.
A centre-right coalition is set to win the most seats inItaly's parliament ahead of the anti-establishment 5-StarMovement, according to the exit polls, although it was unlikelyto produce an outright winner. MKTS/GLOB
Material stocks .AXMM slid as much as 1 percent to athree-week low, with index heavyweights BHP Billiton (LON:BLT) Ltd BHP.AX and Rio Tinto (LON:RIO) Ltd RIO.AX falling 1.5 percent and 1.1percent, respectively.
"I think Trump's proposed tariffs are still weighing on the(materials) sector and will do so for some time," said Spanos.
"It's clearly negative and recent talk from Trump indicatingthat there will be no negotiations to all ally countries, isclearly impacting the materials sector."
President Trump announced on Thursday he would impose heftytariffs on imported steel and aluminium to protect U.S.producers, risking retaliation from major trade partners likeChina, Europe and neighbouring Canada. financial sector in Australia .AXFJ fell as much as0.7 percent to its lowest in more than a week, with the "BigFour" banks losing between 0.4 percent and 0.9 percent.
Commonwealth Bank of Australia CBA.AX lost as much as 1.1percent to over a one-week low.
The top loser on Australia's main index was Retail FoodGroup Ltd RFG.AX , slumping as much as 49.5 percent to itslowest since December 2008 after the company posted a 31.8percent plunge in first-half profit on Friday. New Zealand's benchmark S&P/NZX 50 index .NZ50 climbed 0.4 percent, or 28.98 points to 8,317.4, led byhealthcare and industrial stocks.
The top gainer on the index was Fisher & Paykel HealthcareCorporation Ltd FPH.NZ , rising as much as 2.7 percent.