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Australian Market Declines, Led By Mining Stocks

The Australian stock market is declining on Wednesday after three straight days of gains and despite the positive cues overnight from Wall Street.

Mining stocks are among the leading decliners, after Anglo-Australian mining giant BHP Group reported a decline in iron ore production for the quarter ended March and also lowered its full-year production outlook. Investors are also cautious as they look ahead to the release of a raft of economic data from China later in the day.

The benchmark S&P/ASX 200 Index is declining 12.40 points or 0.20 percent to 6,265.00, after touching a low of 6,263.80 earlier. The broader All Ordinaries Index is down 14.20 points or 0.22 percent to 6,358.10. Australian shares closed modestly higher on Tuesday.

Among the major miners, BHP Group is losing almost 2 percent, Rio Tinto is lower by more than 3 percent and Fortescue Metals is falling more than 7 percent.

BHP Group reported a 3 percent decline in iron ore production for the quarter ended March 2019 and also lowered its production outlook for the full year due to the impact of Tropical Cyclone Veronica.

Gold miners are also weak after gold prices fell more than 1 percent overnight. Newcrest Mining is declining almost 1 percent and Evolution Mining is lower by 2 percent.

DuluxGroup said its board of directors has unanimously recommended that its shareholders approve a A$3.8 billion acquisition proposal for the Australian paint and homeware company by Japanese paint group Nippon Paint Holdings Co. Shares of DuluxGroup are gaining more than 27 percent.

In the banking space, ANZ Banking, Commonwealth Bank, Westpac and National Australia Bank are higher in a range of 0.9 percent to 1.4 percent.

Oil stocks are also higher after crude oil prices rose overnight. Oil Search is advancing almost 1 percent and Woodside Petroleum is adding 0.3 percent.

Santos said its first-quarter production jumped 33 percent from last year, while revenues grew nearly 28 percent. The independent gas producer's shares are rising more than 1 percent.

On the economic front, Australia will see March results for the leading index from Westpac today.

In the currency market, the Australian dollar is higher against the U.S dollar on Wednesday. The local currency was quoted at $0.7175, down from $0.7150 on Tuesday.

On Wall Street, stocks closed modestly higher on Tuesday after early buying interest was generated in reaction to earnings news from Dow components Johnson & Johnson and UnitedHealth. This was partly offset by a report from the Federal Reserve showing industrial production unexpectedly edged lower in the month of March.

The S&P 500 briefly dipped into negative territory in late-day trading but ended the session up 1.48 points or 0.1 percent to 2,907.06. The Dow climbed 67.89 points or 0.3 percent to 26,452.66 and the Nasdaq rose 24.21 points or 0.3 percent to 8,000.23.

The major European markets also moved to the upside on Tuesday. While the German DAX Index climbed by 0.7 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both rose by 0.4 percent.

Crude oil prices moved higher on Tuesday amid prospects of tight supply conditions in the market. WTI crude for May ended up $0.65 or about 1 percent at $64.05 a barrel on the New York Mercantile Exchange.

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