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Australian shares cheered by BHP's record annual iron ore output; NZ down

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[BENGALURU] Australian shares rose on Wednesday after global miner BHP reported record iron ore output for fiscal 2018, which sent its shares up over 3 per cent in a boost to peers and overall sentiment.

Wall Street's positive overnight lead also helped the S&P/ASX 200 index put on 0.7 per cent to 6,245.1 at the close. The benchmark fell 0.6 per cent on Tuesday.

The world's biggest miner said its iron ore output rose 3 per cent during the three months through June, topping forecasts, and set its fiscal 2019 production target slightly higher.

BHP's shares rose 3.3 per cent to a near nine-month high on the news, and pulled up the mining index 1.4 per cent.

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Even an expected US$650 million charge to fiscal 2018 results to cover the failure of the Samarco Dam in Brazil did not dampen investor sentiment.

"Everyone knew there was a charge coming; that was probably towards the lower end of the worst-case scenario. I think the hit they have taken is at the lesser end of the scale," said Christopher Conway, head of research and trading at Australian Stock Report.

Positive BHP sentiment cascaded to its peers, with Rio Tinto and South32 Ltd up 0.4 per cent and 0.9 per cent, respectively.

On the other hand, energy stocks extended their declines as oil prices dropped after an industry group reported that US crude inventories rose last week, defying analyst expectations for a significant reduction.

The energy index, fell for a sixth straight session after closing 0.6 per cent lower on Wednesday.

The gold index also fell for a fourth consecutive session, as gold prices hovered near one-year lows, after upbeat testimony to Congress from Federal Reserve Chairman Jerome Powell on the US economy buoyed the U.S. dollar.

New Zealand's benchmark S&P/NZX 50 index dropped 0.4 per cent to finish at 8,946.1.

Healthcare stocks led the losses, while Z Energy was the biggest percentage loser, falling 2.7 per cent after cutting its 2019 operating earnings forecast.

REUTERS