Australian shares fell on Wednesday, as developments on the Sino-U.S. diplomatic tiff over Hong Kong dampened sentiment and cancelled out any boost from easing lockdown restrictions and the resumption of normal activity.
The S&P/ASX 200 index <.AXJO> was down 0.48% at 5,752.3 points, as of 0041 GMT. The benchmark ended 2.9% firmer on Tuesday.
Casting darker shadows over the U.S.-China ties were reports that Washington was working on a strong response to Beijing's planned national security legislation for Hong Kong and that it would be announced before the end of the week.
Miners <.AXMM> were the biggest drag on the benchmark, shedding 3.4% with shares of heavyweights BHP Group <BHP.AX> and Rio Tinto Ltd <RIO.AX> declining 2.9% and 3.2%, respectively.
Gold stocks <.AXGD> dropped 5.4%, led by Northern Star Resources Ltd <NST.AX>, down 7.05%, followed by Saracen Mineral Holdings Ltd <SAR.AX> that lost 6.93%.
Overnight gold prices had taken a blow as widening risk appetite saw investors pulling back from safe havens. Spot gold prices, however, traded flat on Wednesday.
Meanwhile, financials <.AXFJ> rose 2.62% on the back of gains in National Australia Bank Ltd <NAB.AX>.
Shares of the country's third-largest lender rose 4.9% after the bank increased its capital raising plan by A$750 million, supported by strong interest from shareholders.
Meanwhile, Virgin Money UK PLC <VUK.AX> added 8.86% and was among the top percentage gainers in the benchmark.
In New Zealand, the benchmark S&P/NZX 50 index <.NZ50> rose 0.37% to 10,955 after comments from the central bank boosted financial stocks.
New Zealand's Central Bank said the financial system is in a solid position to weather the significant economic impact caused by the pandemic and support the country's recovery.
NZ-listed shares of Australia and New Zealand Banking Group <ANZ.NZ> and Westpac Banking Corp <WBC.NZ> were the top gainers on the bourse advancing 5.08% and 4.62%, respectively.
(Reporting by Shreya Mariam Job in Bengaluru, Editing by Sherry Jacob-Phillips)
