* Sentiment hampered by ongoing trade war worries
* Westpac accepts fine for wrongly processing home loans
* NZ snaps 3 session losing run (Updates to close)
By Nikhil Nainan
Sept 4 (Reuters) - Australian shares fell on Tuesday, as reports of fresh investigations into financial institutions kept investors on edge, while overall sentiment was dampened by the threat of a further escalation in the Sino-U.S. trade dispute.
The S&P/ASX 200 index dropped 0.3 percent to 6,293.1 at the close of trade, coming off the back of a tepid session on Monday.
Financial stocks came under pressure on indications that the country's superannuation regulator is opening up fresh investigations into the sector, following revelations of widespread wrongdoings in a Royal Commission inquiry, which also sharply criticised regulators. (bit.ly/2MLESi7)
Earlier on Tuesday, the Australian Securities and Investments Commission, the nation’s corporate regulator, said Westpac Banking Corp had agreed to pay a A$35 million ($25 million) fine after admitting to wrongly assessing people’s ability to repay mortgages.
The fine comes as the powerful public inquiry has aired allegations of widespread misconduct, including charging customers fees for no service, irresponsible lending and deception of regulators. Initial findings by the Royal Commission is expected to be submitted to the government by the end of September.
Markets hardly budged to the widely expected decision by the Reserve Bank of Australia to keep its key interest rate at an all-time low of 1.50 percent, and a change seems no nearer even as commercial banks nudge up their home loan rates to protect profit margins.
Overall, market sentiment was dulled by festering concerns over the fallout from a global trade war, with manufacturing activity data in Asia and Europe showing weak orders in a sign that the U.S.-led trade frictions is starting to drag on world growth.
U.S. President Donald Trump has said he is ready to implement new tariffs on Chinese imports as soon as a public comment period on the plan ends on Thursday.
Energy stocks were the biggest drags, after Whitehaven Coal slid 7.6 percent, with the stock trading ex-dividend.
On the positive ledger, Ausdrill gained 9.2 percent after it released an independent report that gave the go-ahead for its proposed acquisition of underground hard-rock mining contractor Barminco.
New Zealand’s benchmark S&P/NZX 50 index ended a three session losing run, rising 0.4 percent to 9,292.15.
Gains from Spark New Zealand and Chorus Ltd helped support the index. New Zealand listed shares of ANZ and Westpac fell 1.3 percent and 0.9 percent. (Reporting by Nikhil Kurian Nainan in Bengaluru Editing by Shri Navaratnam)