Australian shares sink over 2% as Sino-U.S. trade war escalates
* ASX down over 2%, banks and miners weigh
* Energy sub-index set for worst day in 1-1/2 yrs
* Rare earths miner Lynas gains amid trade war woes,
By Devika Syamnath
August 6 (Reuters) - Australian stocks tumbled 2.4% on
Tuesday and looked set for their worst day over a year as the
rapidly escalating Sino-U.S. trade dispute prompted investors
worldwide to dump riskier assets.
Washington designated Beijing a currency manipulator
following an unexpectedly sharp drop in the yuan on Monday,
setting off further falls for battered global stocks.
Australia's benchmark S&P/ASX 200 index slumped
158.1 points to 6,482.2 by 0202 GMT. It has lost about 2.5%
since last Thursday when U.S. President Donald Trump abruptly
said the U.S. would slap 10% tariffs on $300 billion of Chinese
China is Australia's biggest export customer.
"There are two words to describe market sentiment right now
- panic and fear," said BK Asset Management in a note.
"The promise of global central bank easing is not enough of
a reason to buy into this weakness and we will likely see the
Asian indexes extend their respective slides into bear-market
territory," said OANDA in a note to clients.
Australia's mining and energy indexes gave
up as much as 1.7% and 4.2%, respectively.
Mining major BHP Group declined as much as 3.1% to
its weakest in over two months, while Fortescue Metals Group
lost up to 7.1%.
However, rare earths miner Lynas Corp jumped as
much as 7.1% and was among the top gainers on the benchmark. Its
Malaysian rare earths processing plant's license is set to be
extended, sources told Reuters.
Rare earths have been in focus since reports that suggested
the minerals could be brought into the U.S.-China trade war.
China is a major global supplier.
Oil and gas company Santos Ltd fell to its lowest
level in over five months, while bigger rival Woodside Petroleum
hit an over seven-month low.
Heavyweight financial stocks also weakened, with the "big
four" banks down as much as 2.5%-3.4%.
Tech stocks were the biggest percentage decliners,
with data solutions provider Appen down as much as
Gold stocks were the lone gainers as wider market
turmoil raised the metal's safe-haven appeal. Newcrest Mining
gained as much as 3.2% to scale a near eight-year peak.
In New Zealand, the benchmark S&P/NZX 50 index
dropped 2% to 10,549.52 at 0200 GMT.
Electronic payment platform Pushpay Holdings lost
the most on the benchmark and hit an over four-month low.
(Reporting by Devika Syamnath in Bengaluru; Editing by Kim
© 2019 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.