A flare-up in global slowdown worries led Australian shares to close lower on Wednesday, extending losses into a second session, after US President Donald Trump signalled a delay in sealing a trade agreement with China.
The S&P/ASX 200 index touched its lowest in a month, falling 1.6% to 6,606.5 at the close of trade. The benchmark closed 2.2% lower on Tuesday.
Trade hopes were shredded after Trump warned that a deal might be kept on hold until after the 2020 election, and separately, US Commerce Secretary Wilbur Ross confirmed that new tariffs on Chinese imports would take effect on Dec. 15 as scheduled, unless substantial progress was made.
"The market remains incredibly sensitive to trade developments. The lack of urgency to cut a deal was presented as very real," analysts at RBC Capital Markets said in a note to clients.
Market mood had darkened on Monday after Trump said he would restore tariffs on steel imported from Brazil and Argentina, in the latest sign that the disputes between the United States and its trading partners would continue to sway markets for the foreseeable future.
Heavyweight financial index fell 1.7% to its lowest close since May 20, with Australia and New Zealand Banking Group
leading the decline among the "Big Four" lenders, which all finished in the red.
All energy-related stocks ended in negative territory, driving the sector sub-index down about 2% to close at a nearly two-week low.
Oil and gas major Santos ended 3% lower, while Oil Search finished 1.4% down.
The apparent breakdown in trade negotiations sent copper and nickel prices lower, denting base metal miners including Nickel Mines Ltd and Evolution Mining, which were among top losers in the mining sub-index.
Meanwhile, gold stocks gained 0.3%, benefiting from higher demand for safe-haven bets and bullion prices. Perseus Mining climbed about 7%, while Gold Road Resources advanced nearly 8% at the end of the session.
New Zealand's benchmark S&P/NZX 50 index slipped nearly 0.2% or 18.4 points to finish the session at 11,209.0.
Fuel distributor Z Energy Ltd and dairy company A2 Milk were top losers in the New Zealand benchmark, closing down 2.6% and 1.6%, respectively.