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Australia: Shares recover ground ahead of cenbank decision; China tensions weigh

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Australian shares on Tuesday clawed higher from a sharp decline in the previous session, though rising tensions with largest trading partner China kept gains in check as investors awaited the central bank's decision on benchmark rate.

[BENGALURU] Australian shares on Tuesday clawed higher from a sharp decline in the previous session, though rising tensions with largest trading partner China kept gains in check as investors awaited the central bank's decision on benchmark rate.

The S&P/ASX 200 index was up 0.3 per cent at 6,537.5 by 2350 GMT. The benchmark index closed 1.3 per cent lower on Monday, but posted a record monthly gain of nearly 10 per cent.

The Reserve Bank of Australia is expected to hold its cash rate at a historic low of 0.1 per cent at its monthly policy meeting later in the day, according to a Reuters poll.

The decision comes a day ahead of the third-quarter gross domestic product data, which is expected to show a 2.5 per cent growth in the economy in September quarter, a rebound from a record 7 per cent contraction in the previous quarter, according to a Reuters poll.

Limiting gains in the index were tensions between Canberra and Beijing that flared after Australian Prime Minister demanded an apology from Beijing over a fake image posted on social media of an Australian soldier holding the knife to the throat of an Afghan child.

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Relations between the two trading partners were already at a low following the imposition of anti-dumping tariffs by China on Australian wine imports.

Healthcare firms were the top boost to the index, with CSL and Cochlear jumping 2 per cent and 2.6 per cent, respectively.

Financials were among the top drags on the benchmark, with Westpac slipping as much as 1.2 per cent after country's prudential regulator said the bank breached liquidity standards over the past two years.

Most blue-chip energy stocks declined amid a drop in oil prices, though Santos gained up to 1.5 per cent after the gas producer raised its 2020 output forecast and lowered production cost expectations.

In New Zealand, the benchmark S&P/NZX 50 index was down 0.4 per cent at 12,715.94, with financials weighing the most.

reuters

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