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By Shivangi Lahiri

April 16 (Reuters) - Australian shares ended lower on Wednesday, weighed down by losses in Rio Tinto RIO.AX after the mining giant's first-quarter report showed a multi-year drop in shipments, while U.S.-China trade tensions further dampened risk appetite.

The S&P/ASX 200 index .AXJO was down at 7,757.60 by the close of trade. The benchmark index snapped a two-day winning streak, staying roughly 175 points below the level seen before the U.S. tariff announcements.

Mining stocks lost 0.6% .AXMM to weigh the most on the benchmark. Rio Tinto, the world's largest iron ore producer, said its quarterly iron ore shipments fell to their lowest levels since 2019 due to weather disruptions and also flagged further impact.

Shares of Rio Tinto fell 2.7%, and rivals BHP BHP.AX and Fortescue FMG.AX shed 1.2% and 2.4%, respectively.

A 1% jump in Australian banking stocks .AXFJ helped limit the downside trend, with the "Big Four" lenders advancing between 0.8% and 1.5%.

Junvum Kim, sales trader at Saxo Capital Markets, attributed the gains to a possible rotation into banking stocks from mining and energy stocks.

Banks play a crucial role in Australia's economic growth and are seen relatively well-positioned for the trade war between the United States and China, the country's largest trading partner.

Nvidia NVDA.O closed flat overnight after the company warned of a $5.5 billion impact from U.S. export restrictions on some AI chips to China, weighing on the tech-heavy Nasdaq Composite index .IXIC.

The news pressured Australian technology stocks, which fell 1.3%, with sector heavyweights Xero XRO.AX and WiseTech Global WTC.AX each losing 1.2%.

Investors now await local jobs data and New Zealand's quarterly inflation print on Thursday for clues on the central banks' monetary policy trajectory.

Australia's upcoming federal election on May 3 continues to weigh on financial markets, as the possibility of a hung parliament raises uncertainty around future policy decision.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index .NZ50 rose 0.5% to finish the session at 12,067.92 points.

(Reporting by Shivangi Lahiri in Bengaluru; Editing by Sherry Jacob-Phillips)

((shivangi.lahiri@thomsonreuters.com))

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