Trade worries hit commodity prices, weigh material stocks...

• Trade worries hit commodity prices, weigh material stocks
• Telecom stocks lead losses after gaining on TPG-Vodafone deal
• Australian, NZ shares down, but set to gain for the week

Australian shares fell on Friday as the latest development in the U.S.-China trade dispute soured sentiment, while telecom stocks led declines after gaining on Thursday's TPG-Vodafone merger.

The S&P/ASX 200 index (xjo) slipped 0.1 percent, or 6.7 points to 6,345.1 by 0202 GMT.

Bloomberg reported that U.S. President Donald Trump is ready to impose tariffs on $200 billion more in Chinese imports as soon as a public comment period on the plan ends next week.

Shares were flat on Thursday but are set to rise 1.5 percent for the week, recouping all last week's losses.

Telecom stocks took the biggest falls, just a day after TPG Telecom (TPM) and Hutchison Telecommunications (Australia) (HTA) , Vodafone Group's VOD.L Australian unit, agreed to combine into an entity with an implied enterprise value of A$15 billion ($10.88 billion).

The deal will create a much larger third player in the sector, stepping up competition for the likes of Telstra (TLS) and Optus. Both TPG and Hutchison were down, falling over 5 percent and 8 percent respectively.

Telstra, which gained on Thursday, fell 4 percent over concerns of a review into the company's copper network by the Australian Competition and Consumer Commission.

Damian Rooney, director of equity sales at Argonaut, said he saw more importance in the Australian regulator's plan to review Telstra's fixed line business than proposed director changes at its Annual General Meeting in October.

"I think that is probably a small negative for sentiment," he said.

Trump's latest salvo saw commodity prices slip, undermining Aussie materials stocks, with the sector index .AXMM down 1.2 percent.

"It is going to continue to potentially trouble the base metal complex. Saying that, we have a natural Aussie dollar hedge which helps out but uncertainty is no friend to the market," Rooney added.

"I think the tariff issue is not going away in the short term."

Global miners BHP (BHP) and Rio Tinto (RIO) fell 0.8 percent and 0.7 percent, respectively.

Among the top losers on the market was Harvey Norman Holdings (HVN) , which reported a 16 percent drop in annual profit, sending its shares more than 4 percent lower.

New Zealand's benchmark S&P/NZX 50 index (nz50) dropped 0.5 percent, or 42.21 points to 9,297.67, but remains on course for a 1.5 percent weekly rise. Stocks had climbed to a record high on Wednesday.

Fonterra Co-operative Group (FCG) edged lower after it cut its farmgate milk forecast for 2018-2019 by 3.6 percent.

Meanwhile, a2 Milk Company (ATM) lost 1.4 percent, which was mirrored by Fletcher Building (FBU)

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