A last-minute escalation in the trade war between the United States and China dragged the ASX into the red on Tuesday.

The S&P/ASX 200 index closed 0.1 per cent, or 5.4 points lower at 8374 points.

US President Donald Trump’s 10 per cent tariff on all imports from China came into effect late in the session, as threatened, and was quickly overtaken by Beijing retaliating with tariffs on US goods: 15 per cent on coal and liquefied natural gas and 10 per cent on oil and agricultural equipment.

The Australian dollar tumbled below US62¢ on the news. Meanwhile, Mexico and Canada earlier negotiated the postponement of Mr Trump’s proposed 25 per cent tariff on imports from both nations, facilitating a brief interval of market calm through most of the Asia trading session.

All of the major banks lost ground. Commonwealth Bank reversed earlier gains, slipping 0.3 per cent to $157.70. The sell-off was broad, with property industry heavyweight Goodman Group tumbling 1.2 per cent to $US35.46 and retail and industrial giant Wesfarmers falling 1 per cent to $74.45.

A sell-off in energy stocks reflected lower oil prices as Canada held off the 10 per cent tariff on its fuel exports. Brent crude tumbled on Tuesday to $US75.31 a barrel, reversing a rally on Monday that saw prices top $US77. Woodside fell 0.9 per cent to $24.35 and refiner Ampol fell 1.8 per cent to $28.65.

Elsewhere on the index, technology stocks rallied, buoyed by positive earnings from Palantir that sent its shares surging more than 23 per cent in after-hours trading.

WiseTech jumped 3.6 per cent, closing at $124.50, TechnologyOne rose 1.9 per cent to $31.27 and NextDC 1.4 per cent to $14.74. Bitcoin managed a 7 per cent rise on Tuesday, trading above $US101,000, after investors flocked back to cryptocurrencies.

Stocks in focus

Pro Medicus posted the index’s biggest gain. Its shares jumped 5.2 per cent to $283.92 after the company signed a $53 million contract with US healthcare network BayCare to roll out its Visage diagnostic imaging platform.

In corporate news, Seek’s proposed acquisition of Xref for $42.1 million fell through after the bid failed to receive sufficient support from the takeover target’s shareholders. Seek’s shares were flat at $23.07 while Xref tumbled 22.6 per cent to 12¢.

Predictive Discovery shares rallied 13.2 per cent, closing at 30¢, on news the gold explorer would offload a 10 per cent stake to two mining investors to raise $69.2 million.