The Australian share market has closed lower, dragged down by the materials sector following Rio Tinto's first-half earnings miss and further concerns over the trade war between the US and China.
The benchmark S&P/ASX200 index ended down 34.8 points, or 0.55 per cent, at 6,240.9 points on Thursday, while the All Ordinaries was down 34.4 points, or 0.54 per cent, to 6,327.7 points.
Commodity prices fell after US President Donald Trump proposed increasing tariffs on $US200 billion worth of Chinese imports from 10 per cent to 25 per cent in an escalation of recent trade tensions.
CMC Markets chief strategist Michael McCarthy said this, combined with Rio Tinto's half-year net profit coming in below expectations, caused the materials sector to finish Thursday down almost across the board.
"Most analysts see (trade war) as having an impact on global growth, and of course important industrial commodities like copper and oil are very sensitive to changes in that demand," Mr McCarthy said.
Rio Tinto hit a more a than three-month low, closing down $4.00, or 4.9 per cent, at $77.65, while BHP was down 3.3 per cent to $33.92.
BHP was also hit by workers at its giant Escondida copper mine in Chile voting to go on strike.
The Australian dollar fell on a combination of China worries, weaker Asian markets and pressure from the strengthening US dollar.
This is despite Australia's trade surplus rising to $1.87 billion for June, according to ABS data released on Thursday - a dramatic increase from the $725 million recorded in May.
The Federal Reserve in the US ended a two-day policy meeting and reported the strength of its economy and kept interest rates unchanged.
The Aussie was buying 73.80 US cents at 1700 AEST, down from 74.07 US cents on Wednesday.
ON THE ASX:
* The benchmark S&P/ASX 200 index closed down 34.8 points, or 0.55 per cent, at 6,240.9 points
* The broader All Ordinaries index was down 34.4 points, or 0.54 per cent, to 6,327.7 points.
* The SPI200 futures contract was down 34 points, or 0.55 per cent, to 6,192.0 points at 1630 AEST.
CURRENCY SNAPSHOT AT 1700 AEST:
One Australian dollar buys:
* 73.8 US cents, from 74.07 US cents on Wednesday
* 82.403 Japanese yen, from 83.038
* 63.44 euro cents, from 63.41
* 56.40 British pence, from 56.48
* 108.97 NZ cents, from 109.05
The spot price of gold in Sydney at 1700 AEST was $US1,218.17 per fine ounce, down from $US1,220.81 per fine ounce on Wednesday.