Andrada Mining. Share News (ATM)

By Aditya Soni

March 26 (Reuters) - Australian shares tumbled to a nearfive and a half month low on Monday, following a sharp fall onWall Street, as fears about a potential U.S. trade war withChina continued to rattle investors.

The S&P/ASX 200 index fell 0.6 percent or 33.5points to 5,787.2 by 0042 GMT. The benchmark dived about 2percent on Friday.

U.S. stocks plunged on Friday as nervous investors tried tominimise losses as fears of a potential trade war mounted.

The gyrations in U.S. markets were on the minds ofAustralian investors today, said James McGlew, executivedirector for corporate stockbroking at Perth-based Argonaut.

"Markets can price risk but they can't price uncertainty,and there is a lot of uncertainty created with regards to thesemoves with tariffs and trade wars."

Mirroring a fall in U.S. financials, the local financialsindex slumped by as much as 1.2 percent to its lowest inmore than 16 months.

Banks, which accounted for most of the losses on thebenchmark, have also been under pressure from a government-backed Royal Commission enquiry into misconduct by financialinstitutions.

The country's top banks routinely and repeatedly breachedlaws when issuing home loans, credit cards and other consumerloans, the first round of hearings was told.

"The Royal Commission is very damaging to sentiment and itwould appear that the Commonwealth Bank has the most to answerto so they have already started to move on executive changes,"added McGlew.

Commonwealth Bank of Australia slipped 0.5 percentto its lowest since November 2016 after announcing changes toits senior executive team.

Wealth manager AMP Ltd dipped 1.7 percent to itslowest since Feb. 8. It said Chief Executive Craig Mellerintended to retire around the end of 2018.

Fears of a trade war also hit commodities prices, leading toa weakness in materials stocks, especially miners. BHP,the world's biggest miner, slipped 0.7 percent, while BlueScopeSteel Ltd fell about 2 percent.

However, safe-haven buying led to a rise in gold prices,boosting gold miners. Newcrest Mining Ltd climbed 2.1percent to a near two-week high.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50index fell 1.2 percent or 100.3 points to 8,415.06.

Consumer staples and healthcare stocks led the losses, witha2 Milk Company Ltd plunging 4 percent to its lowest inaround 2 1/2 weeks. Ryman Healthcare Ltd slipped 1.7percent.

New Zealand posted a monthly trade surplus in February asthe detection of "stink bugs" on four vehicle carriers at localports and subsequent delays in offloading reduced the totalvalue of vehicle imports, Statistics New Zealand said on Monday.

(Reporting by Aditya Soni in BengaluruEditing by Eric Meijer)