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Australia: Shares fall, dragged down by BHP; NZ slips too

[AUSTRALIA] 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 was off 0.3 per cent or 16.3 points to 5,874.1. The benchmark rose 0.2 per cent 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 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 (IMF) trimmed its global growth forecasts for 2019 and 2020 citing weakness in Europe and an unresolved US-China trade war.

Damian 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 per cent lower.

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

The Anglo-Australian miner posted a 9 per cent fall in second-quarter iron ore production and flagged a US$600 million negative impact due to production disruptions at its copper and iron ore operations.

Other blue-chips in the sector, Rio Tinto Ltd and Fortescue Metals Group Ltd dropped 0.4 per cent and 0.9 per cent, respectively.

Financial stocks, which account for nearly half the benchmark, fell 1 per cent, with biggest lender Commonwealth Bank of Australia down 1.3 per cent.

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

Consumer stocks also slipped. Woolworths Group lost 0.4 per cent and Australia-listed shares of A2 Milk fell 0.8 per cent.

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

Sector heavyweight Woodside Petroleum firmed 0.5 per cent. Santos Ltd gained as much as 1.2 per cent and was on track for a sixth straight gain.

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

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