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Australia shares ease as material, financial stocks sag; NZ down

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[BENGALURU] Australian shares fell for a third straight session on Thursday, as the basic materials sector saw a steep fall on softer metal prices and as financials lost ground on technical selling.

The S&P/ASX 200 index fell 31.44 points, or 0.5 per cent, to 5,861.7 by 0257 GMT. The benchmark dropped 0.98 per cent on Wednesday.

The results of the US Federal Reserve's policy meeting, where they kept rates unchanged, also hurt the market as the dollar strengthened, knocking the Aussie lower.

The Fed held fire on interest rates and downplayed weak first-quarter economic growth and emphasised the strength of the labour market, in a sign it could tighten monetary policy as early as June.

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Meanwhile, Australia's March trade surplus of A$3.1 billion (S$3.21 billion) failed to meet economists' expectations for a A$3.4 million surplus in a Reuters poll.

The decline in the index was led by the basic materials sector which fell as miners declined on weaker prices of base metals and iron ore, while gold stocks lost on an overnight decline in gold.

Rio Tinto, BHP Billiton and Fortescue Metals fell between 0.1 per cent and 4.2 per cent, while Newcrest Mining and Evolution Mining shed 2.1 per cent and 2.3 per cent, respectively.

The materials index was down as much as 1.7 per cent in its eighth straight session of losses, hitting its lowest in nearly six months.

The financials index was down 0.7 per cent as three of the 'Big Four' banks lost between 1.1 per cent and 2 per cent.

National Australia Bank was up 0.4 per cent, snapping two losing days, after it reported a 2.3 per cent rise in first-half cash profit, beating expectations.

In the financial sector, "more of what we're seeing is index selling. Financials constitute almost half of the index," said Michael McCarthy, chief market strategist at CMC Markets.

"We're seeing a number of technically buy/selling programmes hitting the market, and because of their index weighting, that's turning into direct pressure on financial stocks."

Telecom stocks also fell with Telstra down 1.1 per cent, and Vocus Group, which slumped nearly 30 per cent on the previous session, lower at one per cent.

New Zealand's benchmark S&P/NZX 50 index was 0.4 per cent, or 30.27 points, lower at 7,375.57, as the financial sector extended losses with New Zealand shares of Westpac Banking and Australia and New Zealand shares losing well over one per cent.

The energy sector was also lower with Z Energy down as much as 1.7 per cent, its biggest intraday percentage fall in two weeks.