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Australia, NZ: Australia shares hit more than 3-1/2-mth high, NZ shares edge lower

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[SYDNEY] Australian shares rose nearly 0.5 per cent on Wednesday as stronger commodity prices pushed the index to more than a 3-1/2-month high, with miners leading the way.

The S&P/ASX 200 index rose 0.33 per cent, or 17.1 points to 5,205.8 by 0253 GMT, near the session high of 5,232.7 - the highest since January 5. The benchmark rose one per cent on Tuesday.

"It is all about the miners today on the back of iron ore rallying more than 4 per cent overnight," said Chris Conway, head of research and trading, Australian Stock Report.

BHP Billiton Ltd rose nearly 3 per cent to hit a five-month high, while Rio Tinto Ltd rose 3.5 per cent to hit a high of nearly A$52 a share - the highest since Oct 2015.

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BHP Billiton on Wednesday cut its fiscal 2016 iron ore production guidance by 10 million tonnes to 260 million tonnes due to bad weather and rail maintenance, further reducing ore shipments into an oversupplied global market.

While Australia's commodities sector enjoyed a strong start to the session, the country's financials segment weighed on the index.

Shares in Australia and New Zealand Banking Group fell more than one per cent, while Commonwealth Bank of Australia and National Australia Bank Ltd fell nearly 0.5 per cent.

New Zealand's benchmark S&P/NZX 50 index edged down 0.13 per cent, or 9.04 points, to 6,864.00 on Wednesday.

Accounting software company Xero lost 1.43 per cent, while casino operator Sky City fell 0.78 per cent.

Mighty River Power dropped 1.86 per cent on some profit taking after the company's quarterly results met investors' expectations.

Dairy company A2 Milk rose 2.17 per cent as an auction held early on Wednesday morning showed global milk prices had risen for the second auction in a row.

Shares in Fonterra's fund, which provides investor exposure to the farmer-owned dairy exporter, also rose a more modest 0.35 per cent.