Miners, energy stocks down more than 2%
Investors seek safety in gold, consumer staples
US tariffs hit on NZ exporters manageable -analysts
By Roshan Thomas
April 3 (Reuters) - Australian shares closed lower on Thursday as President Donald Trump's unexpectedly aggressive approach to reshape global trade unsettled investors.
The benchmark index S&P/ASX 200 .AXJO dropped 0.9% to end at 7,859.7 points. It slid as much as 2.1% earlier in the day.
The sell-off was triggered by Trump's overnight announcement of imposing at least a 10% tariff on all exports to the U.S., with even higher duties on some nations to counter large trade imbalances.
"While Australia's direct trade exposure to the U.S. is minimal, the knock-on effects via China and broader Asian nations that have seen hefty tariffs could weigh on our export-heavy economy", said Josh Gilbert, market analyst at eToro.
Citi analysts said, "While reciprocal tariffs may add to domestic inflation, our economists expect the Reserve Bank of Australia could be concerned about consumer confidence, cementing their expectations of 25 basis point rate cuts to occur in May."
In Sydney, miners .AXMM lost 2.3%. BHP Group BHP.AX, Rio Tinto RIO.AX and Fortescue FMG.AX shed 2.5% to 3.5%.
Banks .AXFJ dropped 0.6%, while energy stocks .AXEJ fell 2.7% as oil prices sank. O/R
Technology stocks ended 2.9% lower, mirroring the overnight drop in Nasdaq futures. .N
On the flip side, gold stocks .AXGD gained 1.3%, tracking the jump in bullion prices to a record high. GOL/
The hunt for safe havens also pushed investors to consumer staples, which helped the overall consumer index .AXSJ gain 1.3%.
"Consumer staples are generally outperformers in nervous markets as investors gravitate towards businesses that have consistent demand ... rather than discretionary spend," said Mark Gardner, CEO and head of equities advisory at MPC Markets.
New Zealand's benchmark S&P/NZX 50 index .NZ50 rose 0.1% to 12,338.57 points.
"The direct impact of U.S. tariffs on New Zealand exporters is likely to be manageable. Indirect effects will be more significant but are harder to assess," Westpac analysts said.
(Reporting by Roshan Thomas in Bengaluru, additional reporting by Rajasik Mukherjee; Editing by Savio D'Souza)
((Roshan.Thomas@thomsonreuters.com))
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