* Investors wary about escalation in U.S.-China trade war
* Material stocks face the brunt of the uncertainty
* Financials set for sixth session of losses
By Nikhil Nainan
Sept 6 (Reuters) - Australian shares extended losses on Thursday as a cocktail of negative factors including tumult in emerging markets, international trade tensions and domestic banking sector woes left investors with few incentives to bid up prices.
The S&P/ASX 200 index fell 0.9 percent, or 57.1 points, to 6,173.3 by 0200 GMT, on track for the sixth straight session in the red after the benchmark dropped 1 percent on Wednesday.
A public comment period on the possibility of fresh U.S. tariffs on another $200 billion of Chinese goods ends on Thursday, stoking fears of a major escalation in the Sino-U.S. trade dispute that has rattled global financial markets over the past several months.
The resource-rich Australian economy is particularly vulnerable to any sharp hit to growth in China, its major export market.
“Concern is that we will see a further escalation in trade disputes and the impact that has on global trade and a number of trade markets has investors very cautious and in a risk-off mode,” said Michael McCarthy, chief strategist at CMC Markets and Stockbroking.
Rising tensions and weaker commodity prices have hit material stocks of late as investors flock to safer bets like the U.S. dollar. This has made metals priced in the greenback costlier for non-U.S. investors.
After a hefty 86.9 point drop the previous session, the material index fell 1.3 percent, led by global miner BHP down 2.4 percent.
The financial sector also remains under the gun amid damaging revelations of widespread wrongdoings from a high profile inquiry.
NIB Holdings led the broad-based losses among financials, down as 4.1 percent, while among the Big Four banks Westpac Banking lost 0.3 percent.
Elsewhere, Investa Office Fund rose 1.4 percent after it said Blackstone Group is prepared to hike its buyout offer, topping an offer by Canada’s Oxford Properties Group.
Shares in GrainCorp Ltd came off its highs as an improved full year earnings guidance from country’s biggest listed bulk grain handler was offset by its expectations for a “considerable decline” in grain production in eastern Australia in 2019 financial year.
Telstra was an outlier, rising 2.8 percent despite trimming its fiscal 2019 outlook over Australia’s National Broadband Network corporate plan.
“The downgrade they are talking about is a 100 million dollars and the context of the annual profits of Telstra are 9 billion dollars. It’s not a significant downgrade,” McCarthy said.
New Zealand’s benchmark S&P/NZX 50 index lost 1.2 percent, or 108.16 points to 9,119.84, falling to a two week low.
a2 Milk Company and Air New Zealand were among the biggest drags, down 3.5 percent each. For more individual stocks activity click on (Reporting by Nikhil Kurian Nainan, additional reporting by Karthika Suresh Namboothiri in Bengaluru Editing by Shri Navaratnam)