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Australian shares fall, dragged down by BHP; NZ slips too

Published 22/01/2019, 12:41 pm
Updated 22/01/2019, 12:50 pm
© Reuters.  Australian shares fall, dragged down by BHP; NZ slips too

© Reuters. Australian shares fall, dragged down by BHP; NZ slips too

* Material stocks down on BHP, weaker copper prices

* Energy stocks rise on firmer oil prices

By Shriya Ramakrishnan

Jan 22 (Reuters) - Australian shares ticked down in thin trade on Tuesday, dragged by the world's biggest miner BHP Group, which fell after reporting a drop in quarterly iron ore production.

At 0103 GMT, the S&P/ASX 200 index .AXJO was off 0.3 percent or 16.3 points to 5,874.1. The benchmark rose 0.2 percent on Monday.

The market had no leads from the United States as Wall Street was closed for Martin Luther King Jr. Day.

While the overall Australian market largely shrugged off weak economic data from China on Monday, the metals and mining index .AXMM took a hit as the world's second largest economy is the top buyer of Australia's commodity exports.

Adding to the gloomy mood, the International Monetary Fund trimmed its global growth forecasts for 2019 and 2020 citing weakness in Europe and an unresolved U.S.-China trade war. Rooney, director of equity sales at Perth-based brokerage Argonaut, said continuing damage from the Washington-Beijing trade war, as evidenced in China's economic data, plus the IMF's growth downgrade added to negative sentiment.

Hurt by fears China could have a sharper slowdown, which would impact copper prices, the metals and mining index traded 0.6 percent lower.

BHP BHP.AX , among the top drags on the benchmark, declined as much as 1.3 percent before paring its losses.

The Anglo-Australian miner posted a 9 percent fall in second-quarter iron ore production and flagged a $600 million negative impact due to production disruptions at its copper and iron ore operations. blue-chips in the sector, Rio Tinto (LON:RIO) Ltd RIO.AX and Fortescue Metals Group Ltd FMG.AX dropped 0.4 percent and 0.9 percent, respectively.

Financial stocks .AXFJ , which account for nearly half the benchmark, fell 1 percent, with biggest lender Commonwealth Bank of Australia CBA.AX down 1.3 percent.

The other "Big Four" banks lost between 1.1 and 1.4 percent.

Consumer stocks also slipped. Woolworths Group WOW.AX lost 0.4 percent and Australia-listed shares of A2 Milk A2M.AX fell 0.8 percent.

But energy stocks .AXEJ firmed 0.5 percent, boosted by higher oil prices, paring some of the benchmark's decline.

Sector heavyweight Woodside Petroleum WPL.AX firmed 0.5 percent. Santos Ltd STO.AX gained as much as 1.2 percent and was on track for a sixth straight gain.

New Zealand's benchmark S&P/NZX 50 index .NZ50 fell 0.2 percent or 17.21 points to 9,131.36.

Financials and consumer stocks led losses, with dairy company A2 Milk ATM.NZ falling 1.6 percent, while New Zealand shares of Westpac Banking Corp WBC.NZ off 1.6 percent.

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