Australian shares retreated on Wednesday, led by heavy losses among mining stocks, as the world’s top iron ore miner Vale SA prepared to resume operations at a key mine.
The S&P/ASX 200 index closed down 0.3 per cent, or 21 points, at 6,256.40. The benchmark added 0.4 per cent in the previous session.
Brazilian firm Vale on Tuesday said it expects to restart operations at the Brucutu mine, its largest iron ore mine in Minas Gerais state, within 72 hours.
Major miners of the steelmaking material have gained significantly since January as supply concerns, fuelled by production disruptions at Vale after a deadly dam disaster, buoyed iron ore prices to near five-year highs.
China’s Dalian iron ore futures plunged 4.7 per cent on Wednesday.
Shares of BHP Group Ltd and Rio Tinto Ltd declined 2.7 per cent and 4.7 per cent, respectively, while Fortescue Metals Group Ltd slumped 8.3 per cent.
Meanwhile, the world’s biggest miner BHP joined rival Rio Tinto in cutting its 2019 iron ore production guidance after a tropical storm hit its quarterly output.
The metals and mining sub-index saw its worst session since December 2018, declining 2.7 per cent.
Gold miners also posted losses after prices of the safe haven metal held near a 4-month low as China’s first-quarter growth beat expectations, driving demand for riskier assets.
Newcrest Mining Ltd slipped 0.9 per cent, while peer Evolution Mining Ltd lost 2.3 per cent.
Export-driven health stocks dived 1.6 per cent after the upbeat China data pushed the Australian dollar to a 2-month high against the greenback.
Drugmaker CSL Ltd ended down 1.9 per cent.
Bucking the trend, financials advanced 0.9 per cent, in line with Wall Street peers that edged higher on positive corporate earnings.
Top lenders Commonwealth Bank of Australia and Westpac Banking Corp gained 0.8 per cent and 1.5 per cent, respectively.
New Zealand’s benchmark S&P/NZX 50 index closed up 0.7 per cent, or 73.85 points, at 9,982.24.
Prime Minister Jacinda Ardern on Wednesday said her government would not proceed with a proposal for a capital gains tax, and ruled out ever implementing such a tax under her leadership.
Retirement village operator Ryman Healthcare, which owns property assets and benefits from capital gains in asset sales, rose as much as 5.6 per cent after the announcement.
Source: Economic Times