* BHP biggest drag on the benchmark
* Gold miners rise on safe haven buying
* GrainCorp falls on grim outlook (Updates to close)
Aug 2 (Reuters) - Australian shares closed at their lowest level in over a week on Friday, with mining stocks leading declines after U.S. President Donald Trump said he will slap a 10% tariff on $300 billion of Chinese imports.
The S&P/ASX 200 index ended down 0.3% or 20.3 points at 6,768.6, after losing 0.4% in the previous session. The benchmark fell 0.4% for the week.
Trump’s announcement on Thursday extended tariffs to nearly all of the Chinese goods the United States imports, ratcheting up a protracted tussle that has weighed on global growth and battered equities.
Mining stocks, whose top export destination is China, dropped to an over six-week trough and accounted for majority of the losses on the benchmark.
World’s biggest miner BHP Group Ltd fell 3.7% to its lowest since June 11 and was the biggest drag on the main index.
Meanwhile, Rio Tinto slumped to a near-three month trough despite posting its highest margins in a decade and delivering a record interim payout.
Iron ore miners were also hurt by a near 5% fall in Chinese futures contracts for the steel-making commodity.
However, the elevated trade tensions boosted the appeal of gold, driving a rally in miners of the precious metal.
Resolute Mining Ltd ended at its highest since Feb. 24, 2017 and was the top gainer on the benchmark.
Investors also bought heavily into shares of rare earths miner Lynas Corporation which had its best day in almost two months.
Elsewhere, the country’s biggest bulk grain handler GrainCorp Ltd closed at its lowest in one month after flagging its first annual loss in a decade due to a prolonged drought in eastern Australia.
In New Zealand, the benchmark S&P/NZX 50 index ticked up 3.05 points to finish at 10,863.87.
The index posted a weekly gain of 0.5%, extending a winning streak to a eight consecutive week.
The country’s central bank is all but certain to cut rates to record lows next week, and keep the door open for more easing, a Reuters poll showed, as global policymakers unfurl a fresh burst of monetary stimulus to fight slowing growth in the face of intensifying trade disputes.
Contact Energy Ltd gained 1.8% and was among the top boosts to the benchmark. (Reporting by Aditya Soni in Bengaluru; Editing by Kim Coghill)