Shares sink to five-month lows

AUSTRALIAN shares fell back yesterday to levels not seen since mid-October, with almost every sector in negative territory as worries of a protectionist trade war continue to weigh down global markets.

The ASX200 index finished down 0.52 per cent at 5790.5 with retreating stocks led by the major banks.

The All Ordinaries lost 0.5 per cent to 5901.4 points.

Bell Direct equities analyst Julia Lee said that losses stabilised through the day.

“We are seeing some green shoots of a bounce, US futures are trading higher and around the region Korea (up 0.5 per cent) is actually on positive trading ground,” Ms Lee said.

“The market is hoping [US President] Donald Trump’s talk on China tariffs is a negotiating technique rather than a signal of an all-out trade war and, given that China is the largest holder of US treasuries, they both have quite a bit to lose,” Ms Lee said.

Ms Lee said that over the next two-week trade negotiation period the market would be choppy and likely move around on headlines.

Australia’s big four banks were out front of losses, with the Commonwealth Bank shedding 1.1 per cent to $72.0, while ANZ dropped 0.7 per cent to $27.52, NAB dropped 0.7 per cent to $28.78 and Westpac fell 0.6 per cent to $28.67.

The top miners lost ground as Dalian iron ore futures fell, with BHP Billiton off 0.6 per cent at $28.60, Rio Tinto down 0.2 per cent to $73.32, and Fortescue Metals 0.9 per cent weaker at $4.61. AAP