June 20, 2013 / 12:32 AM / in 4 years

Australian shares slump as Fed comments take toll on global equities

(Updates with movements in early trade)

SYDNEY, June 20 (Reuters) - Australian shares dropped 1.4 percent on Thursday morning, its largest one-day drop in a month, as global equities tumbled after Federal Reserve Chairman Ben Bernanke confirmed fears the U.S. central bank could begin to scale back it stimulus measures later this year.

Banks led the early selloff, with top lender the Commonwealth Bank of Australia dropping 2.1 percent and Westpac Banking Corp losing 2.2 percent.

Big-cap miners BHP Billiton Ltd fell 1.5 percent while rival Rio Tinto Ltd tumbled 1.8 percent.

The S&P/ASX 200 index fell 66.4 points to 4,795 by 0017 GMT. The benchmark rose 1 percent to close at a two-week high on Wednesday.

Investors are were also cautious ahead of the release of the China HSBC flash PMI for June, due at 0145, for signals on momentum in Australia’s largest export market after its factory activity shrank for the first time in seven months in May as new orders fell.

The Australian stock market has been hit hard recently on the Fed stimulus concerns, slowing growth in China and turbulence in Japanese equities.

U.S. stocks fell more than 1 percent on Wednesday after Fed chief Bernanke said the central bank would start to reduce its monthly $85 billion bond-buying stimulus later this year if the economy is strong enough.

New Zealand’s benchmark NZX 50 index lost 1 percent or 43.5 points to 4,402.1. (Reporting by Thuy Ong; Editing by Shri Navaratnam)

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