* Energy stocks drop to over three month low
* Gold stocks rise over 2 percent
By Shreya Mariam Job
May 8 (Reuters) - Australian shares fell on Wednesday tracking losses on Wall Street and with energy firms dragging the index lower as intensifying trade tensions between the United States and China pummelled investor confidence.
The S&P/ASX 200 index dropped 0.6 percent, or 37 points, to 6,258.7 by 0112 GMT. The benchmark rose 0.2 percent on Tuesday.
The two-day round of trade talks between U.S. and China before the steep tariff hike on Chinese goods takes effect on Friday, will take place in Washington with Chinese Vice Premier Liu He in attendance.
U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Monday cast doubt on the talks, telling reporters China had backtracked on previous commitments.
“The pressure we are seeing in the market reflects the repricing of global growth prospects as we reprice the trade dispute,” said Michael McCarthy, chief market strategist at CMC Markets. “With the Australian market exposed to both China and the U.S., the slowdowns in those two global economies is very bad news for Australia.”
Energy stocks dropped as much as 1.6 percent to a more than three month low with oil prices tumbling on trade concerns and higher U.S. crude supplies.
Shares of oil explorer Woodside Petroleum and Santos dipped as much as 1.2 percent and 2.9 percent, respectively.
Financial stocks dipped 0.2 percent with Australia and New Zealand Banking Group down 0.3 percent and Macquarie Group losing 0.6 percent.
Material stocks slipped 0.8 percent with top miner BHP Group falling as much as 1.2 percent.
The world’s largest mining company by market value is facing a landmark $5.0 billion damages claim in the UK over a 2015 dam failure that led to Brazil’s worst environmental disaster. The company in a statement said it intends to defend the claims.
Meanwhile, gold stocks climbed as much as 2.3 percent to a more than one-week high as the precious metal typically finds support during periods of global economic uncertainty.
Shares of Newcrest Mining advanced 1.1 percent, while those of Northern Star Resources gained 3 percent.
New Zealand’s benchmark S&P/NZX 50 index fell 0.7 percent, or 67.7 points, to 9,959.69 ahead of the central bank’s rate decision with economists polled by Reuters nearly split on whether the decision would be a hold or a cut in interest rates.
Meanwhile, shares of A2 Milk Company dropped 2.4 percent following a decline in whole milk powder prices at the fortnightly auction and as China, its largest market, faces further U.S. tariff hikes. (Reporting by Shreya Mariam Job in Bengaluru; Editing by Sam Holmes)