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Australia: Shares retreat after 5-day rally as miners slump

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Australian shares inched down on Thursday, with heavyweight mining stocks extending sharp losses into a third session as iron ore prices continued to slide on worries over Chinese demand.

[BENGALURU] Australian shares inched down on Thursday, with heavyweight mining stocks extending sharp losses into a third session as iron ore prices continued to slide on worries over Chinese demand.

The S&P/ASX 200 index declined 0.4 per cent, or 26.5 points, by 0107 GMT, set to snap five consecutive sessions of gains if the index stays in the negative by the close of trade.

Prices of iron ore slumped more than 3 per cent to their lowest in six weeks on Wednesday, after China's top steelmaking city of Tangshan issued a second-level smog alert that requires mills to further limit operations.

Mining behemoths BHP Group and Rio Tinto gave up 2.4 per cent and 3 per cent, respectively, weighing on the benchmark.

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BHP said it would make a final investment decision on its long-delayed US$17 billion Jansen potash project in Canada around February 2021. It also posted a slight dip in September quarter iron ore production due to planned maintenance at a key port.

Miner South32 added as much as 2.2 per cent after it reported a 9 per cent rise in coking coal production for the first quarter.

Financial stocks gave up earlier gains to fall slightly. If losses hold, the sub-index will snap five straight sessions of gains.

"While earnings may be dropping this year, the yields on these banks are still substantially above what investors may get investing in other banks," said James McGlew, executive director of corporate stockbroking at Argonaut.

Australia wealth manager IOOF Holdings hit its highest in more than 10 months after saying it would now pay 13 per cent less than earlier flagged for Australia and New Zealand Banking Group's pension assets, to reflect changing market conditions.

"(The deal) was already earnings accretive (for IOOF) but this adds a bit more cream on the cake," said Mr McGlew.

ANZ shares dropped as much as 0.3 per cent.

Bank of Queensland lost as much as 4.7 per cent after posting lower full-year earnings and trimming dividend.

In the energy space, Australia's two largest independent gas and oil producers Woodside Petroleum and Santos advanced as much as 1 per cent and 1.7 per cent, respectively, after posting third-quarter results.

Santos' production and sales volumes peaked to record levels, benefitting from higher output from its Western Australia assets, while Woodside reported flat revenue for the quarter as weak LNG prices offset higher output from some gas projects.

The New Zealand benchmark declined marginally, by 2.93 points, to 11,175.71. Television operator Spark New Zealand was the top loser, having lost nearly 2 per cent.

REUTERS