Shares hit five-month lows on trade fears

Australian shares have fallen back to levels not seen since mid-October, with almost every sector in negative territory as worries of a protectionist trade war continue to weigh down global markets.

The ASX is expected to start the day lower after US stocks fell around two per cent on Friday.

The benchmark S&P/ASX200 index finished Monday down 0.52 per cent, at 5,790.5 points, with retreating stocks led by the major banks.

The All Ordinaries lost 0.5 per cent to 5,901.4 points.

Bell Direct equities analyst Julia Lee said that losses stabilised through the day.

"We are seeing some green shoots of a bounce, US futures are trading higher and around the region Korea (up 0.5 per cent) is actually on positive trading ground," Ms Lee said.

"The market is hoping (US President) Donald Trump's talk on China tariffs is a negotiating technique rather than a signal of an all-out trade war and, given that China is the largest holder of US treasuries, they both have quite a bit to lose," Ms Lee said.

Ms Lee said that over the next two-week trade negotiation period the market would be choppy and likely move around on headlines.

Australia's big four banks were out front of losses on Monday, with the Commonwealth Bank shedding 1.1 per cent to $72.02 after losing three key executives ahead of incoming CEO Matt Comyn's arrival on April 9, whle ANZ dropped 0.7 per cent to $27.52, NAB dropped 0.7 per cent to $28.78 and Westpac fell 0.6 per cent to $28.67.

Bendigo and Adelaide Bank dipped 21 cents, or 2.1 per cent, to $9.94 on news long-term CEO Mike Hirst would retire in July, to be replaced by chief customer officer Marnie Baker, who will be the first female managing director in the bank's 160-year history.

The top miners lost ground as Dalian iron ore futures fell, with BHP Billiton off 0.6 per cent at $28.60, Rio Tinto down 0.2 per cent to $73.32, and Fortescue Metals 0.9 per cent weaker at $4.61.

The price of gold and local gold miners rose as geopolitical tensions stoke demand for the safe haven metal, with Newcrest Mining ahead by 1.6 per cent to $20.17 and rival Northern Star up 2.7 per cent to $6.96.

Oil prices reversed their earlier gains after the U.S. rig count hit a three-year high, pointing to rising output but leaving local producers mixed.

Woodside Petroleum fell in afternoon trade, down 0.1 per cent to $29.31, Santos lifted 0.8 per cent to $5.12, and Oil Search rose 0.7 per cent to $7.19.

In local company news, wealth manager AMP was 15 cents, or 2.9 per cent, lower at $5.07 after announcing chief executive Craig Meller will step down at the end of the year.

Harvey Norman shed one cent to $3.63 after the retailer announced its dairy investment, Coomboona Holdings, is in receivership.

And Australian Dairy Farms gained 7.5 cents, or 68.2 per cent, to 18.5 cents after it announced plans to convert six Victorian dairy farms to produce organic infant formula for local and overseas markets.

Meanwhile, the US dollar is trading at a 16-month low against the Japanese yen, pressured by global trade war talk, as falls in commodity prices kept Australian dollar gains against the greenback to a minimum.

At 1700 AEDT, the local currency was worth 77.23 US cents, from 77.09 US cents on Friday.

ON THE ASX:

* The benchmark S&P/ASX200 closed down 30.2 points, or 0.52 per cent, at 5,790.5 points

* The broader All Ordinaries index was down 27.6 points, or 0.47 per cent, at 5,901.4 points

* The SPI200 futures contract was down 17 points, or 0.29 per cent, at 5,777 points

* National turnover was 3.3 billion securities traded worth $6.4 billion

CURRENCY SNAPSHOT AT 1700 AEDT:

One Australian dollar buys:

* 77.21 US cents, from 77.09 on Friday

* 81.05 Japanese yen, from 80.79 yen

* 62.42 euro cents, from 62.50 euro cents

* 54.55 British pence, from 54.63 pence