April 17, 2019 / 6:41 AM / 3 months ago

Australian shares fall as iron ore miners drag; NZ gains

* Mining index sees worst session since Dec 2018

* BHP cuts iron ore output guidance

* NZ PM Arden rules out capital gains tax (Updates to close)

April 17 (Reuters) - 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 percent, or 21 points, at 6,256.40. The benchmark added 0.4 percent 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 percent on Wednesday.

Shares of BHP Group Ltd and Rio Tinto Ltd declined 2.7 percent and 4.7 percent, respectively, while Fortescue Metals Group Ltd slumped 8.3 percent.

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 percent.

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 percent, while peer Evolution Mining Ltd lost 2.3 percent.

Export-driven health stocks dived 1.6 percent after the upbeat China data pushed the Australian dollar to a 2-month high against the greenback.

Drugmaker CSL Ltd ended down 1.9 percent.

Bucking the trend, financials advanced 0.9 percent, 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 percent and 1.5 percent, respectively.

New Zealand’s benchmark S&P/NZX 50 index closed up 0.7 percent, 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 percent after the announcement. (Reporting by Niyati Shetty in Bengaluru; Editing by Rashmi Aich)

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