Dec 15 Australian shares were lower on Thursday,
with commodity-related stocks hit hard by the stronger U.S.
dollar which surged when the U.S. Federal Reserve raised its
interest rate target by a quarter point, and hinted at a brisker
pace of rate hikes next year.
The increase in the federal funds rate to between 0.50
percent and 0.75 percent was widely expected but investors were
unnerved as the Fed also hinted at three hikes in 2017, up from
The unanimous rate decision came as president-elect Donald
Trump prepares to take office with promises to boost growth
through fiscal measures.
Fed Chair Janet Yellen said some policymakers had begun
shifting their assumptions about fiscal policy, while adding
Trump's election had put the central bank under a "cloud of
The S&P/ASX 200 index was 0.9 percent, or 49.32
points, lower at 5,536 by 0130 GMT. The benchmark had fallen
just once in previous seven sessions.
Financials, which had seen a rally sparked by Donald
Trump's election to president, were trading in the red, with
"Big Four" banks sticking to the broader trend.
"Obviously we didn't get a ride on the speeding train. What
you're seeing is a reflection of the slowdown in U.S. after the
rate decision, but a lot of it is currency impact," said Tony
Farnham, an economist with Patersons Securities.
The Fed decision sent the U.S. dollar up 1.3 percent to its
highest in nearly 14 years.
"You had gold and oil prices fall way more after the dollar
got stronger, which reflected in selling in materials and energy
stocks," Farnham added.
Gold hit a 10-month low and the ASX gold index
touched its lowest in seven months.
Newcrest Mining fell as much as 5.2 percent,
while Northern Star Resources claimed a 10-month low.
Global miners, including BHP Billiton, Fortescue
Metals Group Ltd and Rio Tinto, also joined
the downward parade, with their combined falls hitting the
broader index hardest.
Following losses in these heavyweights, the Aussie benchmark
mining index registered its worst day in more than two
Declines in oil prices drove energy stocks down, with
Woodside Petroleum and Santos dropping 2.8
percent and 9 percent, respectively.
New Zealand's benchmark S&P/NZX 50 index fell 0.2
percent, or 15.98 points, to 6,781.88, in its fifth session of
Consumer staples and real estate stocks led the losses.
Sky Network Television was biggest the biggest drag
on the benchmark index, while poultry producer Tegel Group
slumped 16.13 percent to a record low.
(Reporting by Suhail Hassan Bhat; Additional Reporting by
Rushil Dutta; Editing by Eric Meijer)