* AMP drop weighs on index
* NZ shares down 0.7 pct as dairy, industrials drag (Updates to close)
April 17 (Reuters) - Australian shares closed flat on Tuesday, as gains in material and telecom stocks were offset by a sharp drop in the country’s largest wealth manager after a probe into the financial sector heard the firm misled regulators.
The S&P/ASX 200 index inched up 0.2 points to close at 5,841.5. The benchmark closed up 0.2 percent at 5,841.3 on Monday.
Asian stocks wavered after data showed both hot and cold patches in the Chinese economy. China’s economy grew 6.8 percent in the first quarter, but March industrial output missed forecasts.
Australia’s largest wealth manager AMP Ltd dropped 4.4 percent after an inquiry heard the company lied to the country’s corporate watchdog for almost a decade to cover its widespread practice of charging customers for services it did not provide.
The inquiry began last month and is currently focusing on the provision of financial advice by AMP and the country’s four largest banks.
Shares of AMP closed at their lowest since November 2016.
National Australia Bank and Westpac Banking Corp fell between 0.4-0.5 percent, while Commonwealth Bank of Australia ended marginally higher.
Oil Search dropped nearly 2 percent after it cut its full-year production forecast as output from its key Papua New Guinea liquefied natural gas project fell after a major quake in the region in February.
Other sectors, however, were in better shape with telco Telstra Corp up 1 percent, while packaging company Amcor Ltd ended 1.4 percent higher.
Saracen Mineral Holdings was the top gainer on the index, rising 5.6 percent to a record close after the gold miner upgraded its full-year production guidance.
In New Zealand, the benchmark S&P/NZX 50 index fell 0.7 percent or 61.83 points to finish the session at 8,344.52, its worst close in two weeks.
Dairy and industrial stocks dominated the losses, with a2 Milk Company ending down 2.3 percent at its lowest close since Feb. 21.
Auckland International Airport lost 2.7 percent.
The International Monetary Fund (IMF) said on Tuesday that it expected New Zealand to show robust economic growth this year, but noted the housing market still posed medium-term risks to the economy. (Reporting by Chris Thomas in Bengaluru; Editing by Sam Holmes)