(Reuters) - Australian shares lost ground on Tuesday as fresh worries over Sino-U.S. trade frictions stung global investor sentiment.
Overnight, Wall Street reversed course late in the day to post losses after reports the U.S. is planning an additional $257 billion worth of tariffs on Chinese goods if upcoming talks between Presidents Donald Trump and Xi Jinping fail to end the trade war.
The S&P/ASX 200 index <.AXJO> gave up 0.4 percent or 22.40 points to 5,705.80 by 0025 GMT. That followed a 1.1 percent bounce on Monday as investors picked up beaten down stocks following the steep sell-off in world financial markets in the past week over growth worries.
"The biggest issue (today) is probably that the U.S. market having opened firmer, reversed engines in the afternoon and that has set the negative tone for us this morning," said Damian Rooney, director of equity sales at Argonaut.
Multinational construction materials manufacturer James Hardie Industries <JHX.AX> and infant formula maker Bellamy's Australia <BAL.AX> were among the top percentage drags on the benchmark index, shedding more than 3 percent each.
The metals and mining stocks bled badly in morning trade, with the corresponding index <.AXMM> falling as much as 1 percent, with lower gold prices putting more pressure on related stocks.[GOL/]
Among gold stocks, Cardinal Resources <CDV.AX>, Perseus Mining <PRU.AX> and Dacian Gold <DCN.AX> led the losses, all declining as much as about 4 percent.
Big cap miners, including Rio Tinto <RIO.AX> and Fortescue Metals Group <FMG.AX>, were holding up following a recent sell-off partly due to worries over Chinese demand amid the trade frictions between Beijing and Washington. Copper prices were firm, helping the mining sector.
Energy stocks were also hit hard with big names Oil Search <OSH.AX> and Caltex Australia <CTX.AX> falling more than 2 percent each.
Oil prices had edged lower on Monday, with futures on track for the worst monthly performance since mid-2016, after Russia signalled that output will remain high and as concern over the global economy fuelled worries about demand for crude.
Financials, easily the worst performing sector so far in 2018, losing more than 13 percent year-to-date, bucked the market in early trade for modest gains.
Three of the 'Big Four' lenders were trading marginally up, including the country's No. 3 bank Australia and New Zealand Banking Corp <ANZ.AX>, which is scheduled to report its full-year results on Wednesday. ANZ rose as much as about 1 percent in morning trade.
Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index <.NZ50> fell 0.06 percent or 5.3 points to 8,610.29.
(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Shri Navaratnam)
