* Defensive sectors see strong buying ahead of Fed meet
* Heavyweight financials, mining stocks muted
By Ambar Warrick
June 18 (Reuters) - Australian shares rose on Tuesday after the country’s central bank said further policy easing was likely, although buyers largely targeted defensive sectors ahead of a two-day U.S. Federal Reserve meeting.
The S&P/ASX 200 index rose 0.4% or 22.80 points to 6,553.70 by 0142 GMT. The benchmark fell 0.4% on Monday.
In the minutes for its latest policy meeting, the Reserve Bank of Australia said it will likely have to cut rates further to boost the economy. The bank cut its benchmark interest rate earlier this month, driving up equities on the prospect of earning better yields.
Cues for further monetary tightening were also expected from the Fed, with U.S. markets inching up overnight in anticipation, with its statement set to give insight into the impact of the U.S.-China trade war.
“What was expected to be a busy week has turned into a bit of dud ahead of the FOMC as traders have taken a decidedly defensive posture,” said Stephen Innes, Managing Partner at Vanguard Markets.
Healthcare stocks added 0.9% on Tuesday, with CSL Ltd, the fifth largest stock on the S&P/ASX 200, rising 1.2%. Medical devices maker Resmed rose 1%.
Gold stocks rose 0.9%, with Newcrest Mining , the country’s largest gold producer, up 1%. Gold miners have benefited from recent risk-aversion.
Financial stocks and miners, the country’s two largest sectors, firmed 0.3% and 0.4%, respectively.
Australia’s second biggest grocer, Coles Group, added 5.6% and was among the biggest gainers on the ASX 200 after it unveiled a plan to cut A$1 billion ($685 million) in costs over the next four years.
Conglomerate Wesfarmers, which spun off Coles late 2018, rose 1.4%.
New Zealand shares traded sideways, with gains in industrial and telecommunication stocks being offset by laggard consumer stocks.
New Zealand’s benchmark S&P/NZX 50 index rose 0.09%, or 8.79 points, to 10,179.5.
Electricity retailer Meridian Energy rose 0.8%, while a2 Milk fell 2.3%.
Reporting by Ambar Warrick in Bengaluru; editing by Richard Pullin