* China to impose anti-subsidy fee on some Australian wine imports
* Australian benchmark sees worst day in nearly 2 weeks
* Gold stocks decline nearly 4% (Updates to close)
By Shruti Sonal
Dec 10 (Reuters) - Australian shares snapped a seven-day rally on Thursday, with all major sectors trading in the red, as a fall in global equities overnight coupled with geopolitical tensions with China weighed on sentiment.
The S&P/ASX 200 index .AXJO fell 0.7% to close at 6,683.1, after adding nearly 5% in the last seven sessions.
Tensions between Australia and China escalated further after Beijing said it would temporarily impose anti-subsidy fees on some Australian wine imports from Dec. 11. sources said Australia was seeking to boost demand for its cotton from countries such as Vietnam as tensions with China threaten to leave Canberra with large stockpiles. market is due to have a breather and the increased tariff additions by China and the restrictions on some of our exports has been a catalyst for this decline," said Doug James, senior client advisor at Novus Capital.
Troubled winemaker Treasury Wine Estates TWE.AX fell over 2%.
Analysts also warned that restrictions by China on more Australian products could be seen in the coming days.
"The way the geopolitics is playing out, we can expect more Australian products going to China to be taxed on to," said Mathan Somasundaram, market portfolio strategist at Blue Ocean Equities.
Among the sectors, gold stocks .AXGD fell the most, losing nearly 4% following a steep sell-off in bullion prices on Wednesday, as a breakthrough in U.S. fiscal stimulus negotiations remained elusive. GOL/
The mining sub-index .AXMM snapped a seven-day rally to fall 0.8%, dragged down by gold miners.
Shares of travel-related firms such as Qantas Airways QAN.AX and Sydney Airport Holdings SYD.AX declined after UK and U.S. health regulators issued allergy warning on Pfizer (NYSE:PFE)'s PFE.N COVID-19 vaccine. Ltd APX.AX was the top loser on the benchmark, shedding 12%, after the artificial intelligence firm trimmed its earnings forecast. Zealand's benchmark S&P/NZX 50 index .NZ50 fell 0.2% following three straight sessions of gains.