* ASX set for fourth straight weekly gain
* Wesfarmers flags hit to Kmart business
* Coal miners extend losses on China’s import cut plans
By Arpit Nayak
May 22 (Reuters) - Australian shares edged lower on Friday as escalating U.S.-China tensions outweighed hopes of a speedy recovery for the domestic economy from coronavirus-led lockdowns, although the benchmark was on track to post a fourth straight weekly gain.
The S&P/ASX 200 index fell 0.3% to 5,532.1 by 0206 GMT, but the benchmark is set to record gains of over 2% for the week.
U.S. President Donald Trump warned that Washington would react “very strongly” if Beijing imposed national security laws on Hong Kong.
Back home, Australian Prime Minister Scott Morrison has said he wants most social distancing curbs to be removed by July under a three-step plan, raising hopes for a faster economic recovery.
“We have had a good week on markets and need to rest,” said Henry Jennings, senior analyst at Marcustoday, adding that worries about U.S.-China relations are “weighing a little.”
Among sectors, the healthcare sub-index dropped 1.5% to lead declines on the benchmark, with industry giant CSL accounting for the bulk of the losses.
Heavyweight financials sub-index rose as much as 0.9%, with top lender Commonwealth Bank of Australia and National Australia Bank being the biggest gainers.
Retail conglomerate Wesfarmers recouped some losses following a 1.4% drop after flagging a substantial non-cash impairment charge in its low-priced retail chain, Kmart Group.
Top miners BHP Group and Rio Tinto led gains on the mining sub-index as iron ore prices rallied on concerns over tightening supplies from virus-hit Brazil.
However, coal miners Whitehaven Coal and Yancoal Australia extended losses on news that biggest coal importer China may tighten coal import rules in the second half of 2020.
New Zealand’s benchmark S&P/NZX 50 index fell 0.4% to 10,693.39, with Fisher & Paykel Healthcare Corp easing 1.4%.
Reporting by Arpit Nayak in Bengaluru; editing by Uttaresh.V