Australia: Shares turn lower as Fed uncertainty, growth woes hurt

[SYDNEY] Australian shares faltered after a strong start on Friday, as lingering concerns about slower growth in China and the eventual tightening by the U.S. Federal Reserve sapped confidence.

The S&P/ASX 200 index fell 0.4 per cent, or 19.57 points to 5,052.1 by 0143 GMT, after rising to 5,116.3 in early deals. The benchmark rose 1.5 per cent on Thursday.

Fed chair Janet Yellen said on Thursday she expects the central bank to begin raising interest rates later this year, a week after heightening uncertainty in markets after resisting a rate hike on account of slackening global growth. "Heading into the end of the week traders and investors are weary and still concerned about China and the ongoing Fed lift-off conversation," said Chris Conway, head of research, Australian Stock Report. "Caution seems to be the better part of valor at the moment and we expect that will remain the case for the foreseeable future." The index is on track to end the week in the red, down 2.3 per cent so far, after two straight weekly gains. It has lost about three per cent in September so far, after falling 8.6 per cent in August - its worst monthly performance since the global financial crisis.

Banks led the decline with Commonwealth Bank of Australia and Westpac falling more than one per cent each while ANZ and National Australia Bank edged down 0.5 per cent each.

Energy-related shares were sold off with Origin Energy down 1.8 per cent and Karoon Gas falling 2.2 per cent. Miners were also having a bad day with BHP Billiton down 0.3 per cent and Fortescue dropping 2 per cent.

Consumer staples and discretionary shares shone with supermarket Woolworths up 0.7 per cent and Wesfarmers , which owns Coles, rising 0.4 per cent.

For more individual stocks activity click on New Zealand's benchmark NZX 50 index rose 0.25 per cent or 14.2 points to 5,691.07, underpinned by gains in technology and industrial companies. The index, which touched a one-month high on Wednesday, was down 0.4 per cent for the week.

Accounting software developer Xero was the top performer, with a 4.4 per cent gain. It was up 12 per cent this week, the largest rise since February.

Shares in Fonterra's fund, which provides investor exposure to the farmer-owned dairy exporter, and Air New Zealand , were each up 1.6 per cent.

Clothing retailer Pumpkin Patch, however, was hard hit after it warned of bigger losses than initially anticipated, with its shares diving 32 per cent to an all-time low.

REUTERS