* Australian shares have worst week since February
* Financial stocks extend losses for 7th session
* Materials give up 3.5 pct for the week (Updates to close)
By Nikhil Nainan
Sept 7 (Reuters) - Australian shares fell again on Friday as most Asia-Pacific markets kept slumping, partly because of the possibility the U.S.-China trade war could escalate any time.
The S&P/ASX 200 index dropped 0.3 percent to 6,143.8 at the close, extending its losses to a seventh straight session.
For the week, the index shed 2.8 percent, its biggest weekly loss since early February.
President Donald Trump has threatened to impose tariffs on an additional $200 billion worth of imports from China. He could act anytime, as the public comment period in Washington for proposed tariffs ended at 0400 GMT Friday.
China has warned it will retaliate if Washington implements any new measures.
Financial stocks also extended their losing streak to seven sessions, as revelations of widespread wrongdoing in a high-profile Royal Commission inquiry have dogged investors of late.
The day’s losses came after Australia and New Zealand Banking and Commonwealth Bank of Australia followed Westpac Banking Corp in raising mortgage rates.
National Australia Bank, the only Big Four bank that has not raised rates, was down 0.3 percent. ANZ declined 0.5 percent and Westpac by 0.1 percent. CBA rose 0.5 percent.
Mathan Somasundaram, a Blue Ocean Equities market portfolio strategist, said weak wage growth, higher bank funding costs and rising mortgage rates are likely to mean less credit will be available.
“Housing prices are doomed. It’s a tsunami coming at the property market,” he added.
The next round of public hearings of the inquiry, to begin on Monday, will focus on insurance. Some major insurance firms edged lower for the day, with QBE Insurance Group down 0.3 percent.
Material stocks rose 0.3 percent but were still down 3.5 percent for the week.
Galaxy Resources was among the top gainers, up about 10 percent. Global miner Rio Tinto climbed 1.7 percent.
New Zealand’s benchmark S&P/NZX 50 index was a fraction lower, dropping 6.21 points to finish at 9,095.39.
a2 Milk Company fell 2.2 percent and Ryman Healthcare gained 3 percent. (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Richard Borsuk)