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ASX lower as US-China worries weigh

The futures market is pointing to a fall for the ASX at the start of trade

The Australian share market has closed lower, as pessimism about the outcome of the upcoming US-China trade negotiations weighs on market confidence.

The benchmark S&P/ASX200 index finished trade on Wednesday down 46.7 points, or 0.71 per cent, to 6,546.7 points, while the broader All Ordinaries was down 46.7 points, or 0.7 per cent, to 6,667.0 points.

The US government is considering limiting capital flows, particularly investments by US government pension funds, to China as delegates from both countries prepared for new talks set to start on Thursday, media reports say

IG market strategist Jingyi Pan said the optimism in Asian markets on Tuesday about a possible US-China trade deal has been erased by the new developments.

"After blacklisting eight Chinese tech companies at the start of the week, another 28 Chinese entities appear to have been brought into the picture over their role in the repression of Muslim minorities," she said.

"The timing given the proximity to the commencement of trade talks on Thursday elevates the matter as a provocative move."

Almost every sector was lower on Wednesday, led by consumer discretionary shares and the energy sector, which were down 1.7 per cent, and 1.57 per cent respectively.

The only sectors that were higher were industrials and telcos, up 0.07 per cent and 0.29 per cent respectively.

Santos, Woodside Petroleum, Oil Search and Beach Energy were all down, between 1.2 per cent and 2.4 per cent after oil prices dipped overnight.

Consumer discretionary stocks struggled, after the Westpac-Melbourne Institute consumer confidence index suggested sentiment had fallen to a four-year low.

Flight Centre slumped 11.72 per cent after saying half-year profit was likely to come in lower, while Domino's Pizza fell 3.92 per cent and Webjet sank 2.71 per cent.

Shares in Propel Funeral Partners were 3.34 per cent higher at $3.09, after it said a rise in the number of deaths over the late winter and early spring is driving an improved financial performance.

But the big four banks were all lower, with ANZ down 1.2 per cent to $27.09, Commonwealth down 0.53 per cent to $78.18, NAB down 0.11 per cent to $28.06 and Westpac down 0.87 per cent to $28.43.

Mining giant BHP was down 1.35 per cent to $35.13, Rio Tinto was down 0.94 per cent to $87.75 and Fortescue Metals was down 2.06 per cent to $8.56.

The Aussie dollar is buying 67.38 US cents, down from 67.51 US cents on Tuesday.

ON THE ASX:

* The benchmark S&P/ASX200 index closed down 46.7 points, or 0.71 per cent, to 6,546.7 points

* The All Ordinaries closed down 46.7 points, or 0.7 per cent, to 6,667.0 points.

* At 1630 AEDT the SPI200 futures index was down 53 points, or 0.81 per cent, to 6,513.

CURRENCY SNAPSHOT AT 1630 AEDT

One Australian dollar buys:

* 67.38 US cents, from 67.51 US cents on Tuesday

* 72.20 Japanese yen, from 72.50 yen

* 61.47 euro cents, from 61.49 cents

* 55.17 British pence, from 54.91 pence

* 106.78 NZ cents, from 106.82 cents.