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Australia: Shares edge lower as Fed tempers weekly gains; NZ up

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[BENGALURU] Australian shares slipped on Friday but were still set for a second week of gains as the US Federal Reserve stayed on course to gradually raise interest rates.

The S&P/ASX 200 index slipped 0.3 per cent or 14.9 points to 5,913.3 by 0118 GMT, but is set to gain 1.1 per cent this week.

The Fed held monetary policy steady on Thursday, remaining on track to keep gradually raising rates, with the year's fourth hike expected next month.

Michael McCarthy, chief market strategist at CMC Markets, said there had been some hope that the Fed might tilt towards a slower pace of rate hikes after the midterm elections, but it stuck to its previous messaging.

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"That saw a reaction as the US dollar rose and US shares were in the red for most of their sessions, which is bringing some caution to trading today," Mr McCarthy noted.

Materials stocks fell 0.7 per cent with Bluescope Steel down about 3.4 per cent while South32 fell 2.8 per cent.

Australia's Queensland state is set to unveil proposed resource regulations next week for miners to pay into an "insurance fund" for the remediation of old mines.

The regulations, if enacted, will impact the likes of global miners BHP Billiton and Rio Tinto which have operations in the mineral-rich state.

Shares of BHP and Rio weakened 0.4 per cent and 0.8 per cent, respectively.

Energy stocks were down more than 1 per cent after oil prices fell nearly 2 per cent on Thursday as investors focused on rising global crude supply, which has increased more quickly than many had expected.

"Oil is looking shaky and there is no surprise that is weighing on the energy sector this morning - it's the worst performing sector," said Mr McCarthy.

Leading independent gas producers Santos and Woodside Petroleum fell 0.9 per cent each.

Financial stocks erased earlier strength to drop slightly, with National Australia Bank down as much as 0.9 per cent.

Property manager LendLease Group slumped about 16 per cent to its lowest in 18 months after it made a A$350 million (S$349.3 million) after tax provision against underperformance in its engineering and services business.

New Zealand's benchmark S&P/NZX 50 index edged 0.1 per cent higher to 8,901.9.

Z Energy was the top percentage gainer, rising 2.5 per cent while Ryman Healthcare was the top percentage loser, falling 1.5 per cent.

REUTERS