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Australia: Shares drop as miners retreat; New Zealand inches lower

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[BENGALURU] Australian shares ticked lower on Monday as blue-chip mining stocks took a breather after rallying more than 6 per cent last week, while energy firms were pressured by uncertainty over the demand outlook for oil.

The S&P/ASX 200 index fell 13.80 points or 0.2 per cent to 6,540.20 by 0144 GMT. The benchmark rose about 0.2 per cent on Friday.

Early trading in the region was subdued as investors awaited a two-day US Federal Reserve meeting starting on Tuesday.

Weak US economic data and concerns over escalating Sino-US trade frictions have dramatically raised the chance of a Fed rate cut in coming months, though the already-slim risk of an easing this week was further reduced following Friday's strong US sales data.

Metals and mining stocks, which rallied to near 8-year highs on Friday on supply concerns, pulled back in early trade. Global miners BHP Group Ltd, the largest capitalised stock, came off a more than 8-year high to trade 1.3 per cent lower, while Rio Tinto declined 2.2 per cent.

Energy stocks dipped 0.8 per cent, although uncertainty over oil prices amid slowing demand sidelined most investors. Attacks on two oil tankers in the Middle East last week had driven up prices and raised tensions in the region after the United States blamed Iran for the assault.

Woodside Petroleum, the country's largest listed oil and gas explorer, dropped about 0.3 per cent.

Vocus Group, the country's fourth-largest internet provider, plummeted nearly 33 per cent after AGL Energy dropped its US$2.1 billion offer for the company. Vocus was the largest loser on the ASX 200, while AGL rose about 2.6 per cent.

It marked the second time AGL has backed out of a bid for the telco this year, and the fifth time a suitor dropped Vocus over the last two years.

Australian financials advanced about 0.4 per cent, with three of the big four banks rising between 0.5 per cent and 0.7 per cent.

Wealth manager stocks extended a sell-off on concerns of increased regulatory scrutiny towards the sector after the Australian banking watchdog slapped stricter conditions on AMP's pension funds.

Softer guidance from fund manager Challenger Ltd last week had also prompted selling in the sector. AMP and Challenger fell about 1 per cent for the day.

New Zealand stocks edged lower, with defensive local utility firms pulling back.

The benchmark S&P/NZX 50 index fell 0.1 per cent or 11.68 points to 10,223.69.

Electricity retailers Meridian Energy and Contact Energy dropped about 1.1 per cent and 0.3 per cent, respectively. Meridian had recently touched a record high, while Contact hit a near 1-year peak as both firms benefited from safe-haven buying in the wake of growing international trade frictions and growth worries.