June 1, 2018 / 3:32 AM / 3 months ago

Australian shares slip, banks shaken as ANZ faces criminal charges; NZ down

* Banks lead losses, ANZ slumps as it faces criminal charges

* Rio Tinto hurt as U.S. tariffs affect Canada presence

* Health stocks buck trend, hit record

* NZ dairy stocks tank as Synlait hikes milk price outlook

By Devika Syamnath

June 1 (Reuters) - Australian shares edged lower on Friday as the banking sector was shaken by news ANZ is facing criminal charges, while a U.S. move to impose trade tariffs against some of its key trading partners sapped confidence.

The S&P/ASX 200 index fell 0.4 percent, dropping 25.4 points to 5986.5 at 0317 GMT. The benchmark gained 0.5 percent on Thursday.

The day started badly for the banking industry after the Australian competition watchdog served Australia and New Zealand Banking with criminal cartel charges over a $2.3 billion share issue, along with underwriters Deutsche Bank and Citigroup.

The development compounds a publicity nightmare for Australia’s biggest financial firms as they grapple with daily allegations of wrongdoing at the public inquiry, which is scheduled to run to the end of the year.

ANZ was the biggest drag on the benchmark, tumbling 2.4 percent and hitting its lowest in over a month.

“The banks are still not back from the negative press they have been getting in light of the Royal Commission,” said Dale Raynes, Associate Director at CPS Capital, referring to the powerful inquiry into the scandal-ridden sector.

Financial stocks were down as much as 1.2 percent, with National Australia Bank and Commonwealth Bank of Australia losing 1.2 percent and 0.9 percent, respectively.

Overall sentiment was fragile on heightened worries about a global trade war. Canada, Mexico and the European Union swiftly responded with retaliatory tariffs on U.S. imports after Commerce Secretary Wilbur Ross announced a 25 percent tariff on steel imports and 10 percent tariff on aluminium imports.

The mining index was propped up by strength in metal and iron ore prices, though global miner Rio Tinto, whose largest concentration of aluminium smelters is in Canada, dragged the sector.

Rio lost as much as 1.8 percent to its lowest in over three weeks while rival BHP Billiton held up 0.7 percent.

Investors took shelter in defensive stocks, driving gains on the gold and healthcare indexes which advanced 0.8 percent and 1.4 percent, respectively, with the latter hitting a record.

“Healthcare is kind of the stand-out sector. If you’re avoiding the banks, then healthcare is the way to go,” said Raynes.

Cochlear Ltd hit a record, having added 4.3 percent while Sonic Healthcare gained up to 1.6 percent.

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index lost 0.3 percent or 21.76 points to 8637.03 at 0236 GMT.

Consumer staples stocks dented the index the most after dairy products maker Synlait Milk on Friday raised its base forecast milk price for the 2017-18 season, signalling higher raw material costs.

Synlait dropped as much as 4 percent while a2 Milk Company , which has a stake in the former, lost up to 6.6 percent and was the top drag on the index.

Data at home also came in weak, with New Zealand’s terms of trade falling for the first time in more than a year in the March quarter, dropping by 1.9 percent from a record high. (Reporting by Devika Syamnath in Bengaluru, additional reporting by Karthika Namboothiri Editing by Shri Navaratnam)

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