Australia shares slip on Fed, Trump-Xi summit anxiety; NZ edge up

[BENGALURU] Australian shares closed down on Thursday, pressured by signs the US Federal Reserve may trim its massive asset holdings earlier than expected and a highly anticipated meeting between the US and Chinese presidents later in the day.

The cautious mood weighed on Wall Street overnight and dragged down regional markets, denting the S&P/ASX 200 index by 0.34 per cent to 5,856.30 at the close of trade.

Minutes from the March Fed meeting showed most policymakers thought the US central bank should take steps to begin trimming its US$4.5 trillion balance sheet later this year. Wall Street banks had expected no changes until mid-2018.

Australian banks, which have been under selling pressure in the past week as regulators stepped up curbs on home lending, fell one per cent. The "Big Four" gave up 0.9 to 1.4 per cent.

Australia's banking watchdog said on Wednesday that authorities can and will take further action if needed to stop a debt-fuelled bubble in the country's red-hot housing market.

Banks are in focus "as investors assess the possibility of banks being required to increase capital to support housing loans," said Ric Spooner chief market analyst at CMC Markets.

Investors were also wary ahead of a potentially tense meeting between US President Donald Trump and his Chinese counterpart Xi Jinping.

Topping the agenda will be whether Mr Trump makes good on his threat to use US-China trade ties to pressure Beijing to do more to rein in its nuclear-armed neighbour North Korea.

The gold index finished 1.1 per cent higher as investors took shelter in safe-haven assets amid the depressed global backdrop.

Newcrest Mining Ltd rose 0.9 per cent.

New Zealand's benchmark S&P/NZX 50 index ended 0.34 per cent, or 24.47 points, higher at 7,289.52.

The benchmark hit an intraday high of 7,289.53, the highest since October 2016.

Utilities and consumer stocks led the gains, with a2 Milk Company Ltd rising 3.3 per cent, while Meridian Energy Ltd climbed 1.7 per cent.

REUTERS