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Australia: Shares end lower after Fed narrows easing expectations
[SYDNEY] Australian shares ended lower on Wednesday, amid broad weakness in equities globally, after US Federal Reserve officials dampened investors' expectations of aggressive rate cuts soon.
The S&P/ASX 200 index fell 0.26 per cent at the end of trade to 6,640.50 points. The benchmark was 0.1 per cent lower on Tuesday.
Equity markets have rallied this month as investors priced in a rate cut as early as the Fed's July policy-setting meeting, where a 25 basis point cut is being seen with certitude.
However, some market participants were wagering on a half percentage point cut.
St Louis Fed president James Bullard squashed those hopes on Tuesday, saying he did not think the US economy is dire enough to warrant a 50-basis-point cut in July.
Meanwhile, Fed chairman Jerome Powell pushed back on President Donald Trump's demand for a significant rate cut.
Australia's financial sector, the biggest on the main board, led the day's losses, with the country's biggest banks falling in a range of 0.2 per cent-1.1 per cent.
The metals and mining index, unaided by a stronger dollar, ended marginally lower. Its biggest constituent BHP Group finished 0.2 per cent lower, while smaller rival Rio Tinto's shares were up 0.8 per cent.
New Zealand's benchmark S&P/NZX 50 index ended marginally lower at 10,408.05, still hovering around record levels.
Earlier on Wednesday, the Reserve Bank of New Zealand stood pat on its benchmark interest rate, maintaining it at a record low of 1.5 per cent.
However, the central bank signalled that lower interest rates may be needed in the future, citing subdued domestic growth and global economic weakness.