Australia shares rise, NZ at record high on China, U.S. factory indicators

* Mining stocks close at highest since Sept. 2011

* RBA says labour market strong, holds rates steady

* BHP says iron ore output to fall by 6-8 mln tonnes after cyclone

* Fortescue closes at over 10-year peak (Updates to close)

April 2 (Reuters) - Australian shares closed higher on Tuesday, after positive U.S. and China factory activity data fuelled risk sentiment and eased concerns about a global economic slowdown, with New Zealand closing at a record high.

The S&P/ASX 200 index rose 0.41 percent, or 25.40 points, to 6,242.40 at the close of trade. The benchmark rose 0.6 percent on Monday.

Wall Street rallied on Monday, after strong factory activity data in China and the United States coupled with progress in trade talks between the two countries cheered investors.

"China data was significant as it showed one of the important growth engines is still working," said Damian Rooney, director of equity sales at Argonaut. "The U.S. markets have taken the positives out of a mixed data."

Highlighting a strong labour market, the Reserve Bank of Australia (RBA) held interest rates steady, showing no immediate inclination to echo the marked dovish tone that other central banks have adopted recently.

Largely driving gains, financial stocks rose for a fifth straight session, with National Australia Bank Ltd and Westpac Banking Corp up 0.3 percent and 0.5 percent, respectively.

The mining sub-index closed at its highest since September 2011, after China's iron ore futures jumped to a record high with recent news supporting a tight supply outlook.

BHP Group Ltd said initial estimates showed its iron ore production would take a hit of about 6 million to 8 million tonnes after cyclone Veronica affected its operations.

The news follows rival Rio Tinto Ltd's move on Monday to cut its 2019 outlook for iron ore shipments from Pilbara region due to the cyclone.

Shares of BHP and Rio Tinto retreated from their respective near eight-year and more than 10-year highs touched earlier in the session, closing 0.1 percent and 1.1 percent lower, respectively.

However, Fortescue Metals Group ended 3 percent higher at its highest close in more than 10 years, after it earlier said its mining operations were unaffected by the cyclone.

Energy stocks also rose after oil prices hit 2019 highs, with Woodside Petroleum Ltd and Santos Ltd both rising.

New Zealand's benchmark S&P/NZX 50 index rose for a sixth straight day, ending up 1.06 percent or 104.44 points to finish the session at 9,958.35, a record high.

Fonterra Shareholders' Fund and a2 Milk Company Ltd were among top gainers, rising 3 percent and 2 percent, respectively. (Reporting by Rashmi Ashok in Bengaluru, Additional reporting by Aby Jose Koilparambil; Editing by Sam Holmes)

2019-04-02 07:56:01

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