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Australia shares end flat on Fed caution; NZ hits record

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[BENGALURU] Australian shares ended flat on Monday as a rally in financials and materials stocks was offset by losses in other sectors as investors grew cautious ahead of a widely expected US interest rate hike later this week.

The S&P/ASX 200 index rose 3.90 points or 0.07 per cent to 5,998.30 at the close of trade, failing to track a strong lead from Wall Street where stocks climbed on Friday.

Traders see a 96.2 per cent chance of a quarter-point Fed hike, according to Thomson Reuters data.

The benchmark gained 0.3 per cent on Friday, propelled by banks and oil and gas stocks.

Banks accounted for most of the gains on Monday, with the Australian financials index rising 0.2 per cent to its highest since Nov 29, registering fourth session of consecutive gains.

Heavyweight Commonwealth Bank of Australia ticked up 0.5 per cent to a near two-week high, pushing the index up, while Insurance Australia Group Ltd rose 2.2 per cent to its highest close since Nov 22.

Materials stocks followed closely as they benefited from the rise in iron and copper prices.

Mining giant BHP climbed 0.1 per cent, while its rival Rio Tinto Ltd rose 0.4 per cent.

Conversely, industrials accounted for most of the losses, with Transurban Group falling 0.6 per cent to its lowest close in nearly 1-1/2 months.

On the other hand, New Zealand's benchmark S&P/NZX 50 index rose 0.5 per cent or 42.42 points to finish the session at 8,277.51, a fresh record high.

Auckland International Airport Ltd and Fletcher Building Ltd led the upward march of the index as they rose 2.8 per cent and 2 per cent, respectively.