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Australia shares fall on weaker commodities, Fed rate hike; NZ up

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[BENGALURU] Australian shares fell on Thursday, hurt by weaker energy and basic material stocks and an overnight dip on Wall Street after the US Federal Reserve hiked interest rates.

The Fed raised interest rates on Wednesday for the second time in three months, lifting its benchmark lending rate by a quarter percentage point to a target range of one per cent to 1.25 per cent. The central bank also forecast one more rise this year.

"The rate hike was completely expected. The interesting thing, though, were the other figures out last night, the CPI numbers, which were very ordinary," said James McGlew, executive director of corporate stock broking at Argonaut.

"But Janet Yellen then sort of confused the market by saying it is the labour market that she has got her eyes on, and the labour market in the United States is particularly strong at the moment."

Australia shares saw a broad-based sell-off, falling 1.2 per cent, or 67.60 points, to 5,766.30 by 0240 GMT. The benchmark had ended near one month highs on Wednesday after four straight sessions of gains.

The Aussie dollar, however, jumped to a near two-and-half month high after upbeat jobs data, which reinforced the case for a stable interest rate outlook domestically.

Energy and basic materials shares were among the worst performers on the index as commodities and oil prices remained stressed.

Mining giants BHP and Rio Tinto were off 2.8 per cent and 3 per cent respectively, while iron-ore miner Fortescue shed about 2.2 per cent.

Woodside Petroleum and Oil Search were about 2 per cent and 3.7 per cent lower.

Banks, which led the gains in the past two sessions, were down on profit-taking.

Australia's four biggest banks were the top losers on the main board, falling 0.8 per cent to 2.6 per cent.

New Zealand's benchmark S&P/NZX 50 index rose 0.2 per cent, or 14.94 points, to 7,500.27.

A two per cent rise in fuel supplier Z Energy's shares drove the energy sector up, while telecom and consumer staples shares also gained as Spark New Zealand rose 0.8 per cent, while healthcare products distributor EBOS Group added 1.5 per cent.

Fianancials stocks, however, were the biggest drag on the main index as Westpac and ANZ's New Zealand-listed shares lost over 1.2 per cent each.