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Australia: Shares slip ahead of Federal Reserve meet; New Zealand up

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Australian shares were subdued on Tuesday, as markets trod cautiously in the wake of heightened tensions in the Middle East and ahead of the US Federal Reserve's policy meeting this week.

[BENGALURU] Australian shares were subdued on Tuesday, as markets trod cautiously in the wake of heightened tensions in the Middle East and ahead of the US Federal Reserve's policy meeting this week.

The S&P/ASX 200 index declined 0.1 per cent or 8.2 points to 6,665.30 by 0227 GMT. The benchmark closed 0.1 per cent higher on Monday.

Markets await the US Federal Reserve policy decision on Wednesday, where a rate cut is widely expected, but look forward to a further policy outlook considering recent developments in global issues.

During its policy meet, the US Fed will have to consider heightened geopolitical tensions around the globe, such as US-Iran relations following weekend attacks on Saudi Arabia which shut 5 per cent of the world's oil supply.

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Market voices on:

"There is a lot of uncertainty associated with all the international activity, such as in the Middle East," said Doug Symes, senior client adviser at Novus Capital.

"There is a wait-and-see type of sentiment in the market at the moment ... on which way the Americans are going to react to Iran."

Iran has rejected US accusations that it was behind attacks on the Saudi oil plants that risk disrupting world energy supplies and has threatened to retaliate on US bases.

Australian miners fell 1.4 per cent on the back of lower iron ore prices and were the worst performers. The subindex was dragged lower by industry heavyweight BHP Group's 1.4 per celt decline and Rio Tinto's near 2 per cent fall. Gold stocks shed 0.7 per cent ahead of the US Fed meeting.

Financials did not show much strength either, with the subindex slipping 0.1 per cent lower. Among the "Big Four" lenders, Commonwealth Bank of Australia and Westpac Banking Corp were each trading about 0.1 per cent lower.

Meanwhile, energy stocks continued another day of gains, buoyed by higher oil prices. Oil and Gas major Woodside Petroleum rose nearly 2 per cent, while Santos Ltd climbed nearly 1 per cent to boost the industry index.

Nearby, New Zealand's benchmark S&P/NZX 50 index advanced 0.5 per cent or 51.9 points to 10883.68, lifted by healthcare and utility stocks.

Agribusiness firm Scales Corp and freight services provider Mainfreight were among top performers on the New Zealand benchmark, rising over 2 per cent each.

REUTERS