(Reuters) - Australian shares fell on Wednesday with commodity stocks weakening the most as global growth concerns hurt risk appetite, although rare earths miners gained on the possibility that Beijing could halt exports of these metals to the United States.
The S&P/ASX 200 index ended 0.7%, or 44.8 points lower, the benchmark's fourth session of decline in five as tensions between the world's two biggest economies show no signs of cooling off.
The main sub-indexes for both the mining and energy sectors closed more than 0.7% lower for the day.
Adding to the miners' woes, China's iron ore benchmark snapped a rally that had led it to record highs, after the Dalian Commodity Exchange announced increases in transaction fees for some futures contracts.
However, while mining heavyweights BHP Group and Rio Tinto closed 0.6% and 0.7% lower, rare earths firms such as Lynas Corporation, Northern Minerals and Peak Resources surged to close between 9% and 20.5% higher.
China's Communist Party newspaper warned the United States that the country was ready to use rare earths to strike back in their bitter trade war. China controls 80% of the world's supply of these materials used in everything from headphones to night-vision goggles.
Lynas, currently a takeover target, hit its best in more than one year. Any move by China to crimp supply would increase the importance of Lynas which one of the major producers of rare earths.
Top players in the oil and gas space such as Santos Ltd and Origin Energy Ltd fell 1.6% and 2.5%, respectively, as world oil prices weakened after trade war concerns outweighed supply shortfalls.
In other news, engineering contractor Downer EDI lost over 9% to close at its weakest in more than three months after its partner Senvion GmbH filed insolvency proceedings in Germany.
New Zealand's benchmark S&P/NZX 50 index fell 0.3% to 10,096.47, with industrials stocks leading the decline.
Builder Fletcher Building said Precinct Properties New Zealand had to push back opening dates for some construction projects due to a delay by its main contractor, a unit of Fletcher.
Shares of Fletcher and Precinct finished 2.6% and 3% lower, respectively.
(Reporting by Devika Syamnath in Bengaluru; Editing by Jacqueline Wong)
