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Australia shares snap 3-day winning streak ahead of Fed verdict

Credit: REUTERS/DAVID GRAY

Australian shares snapped three consecutive sessions of gains to end lower on Wednesday, as the benchmark tracked an overnight slump in Wall Street, with traders awaiting cues on interest rates from the U.S. Federal Reserve's two-day policy meet.

By Nikhil Subba

March 17 (Reuters) - Australian shares snapped three consecutive sessions of gains to end lower on Wednesday, as the benchmark tracked an overnight slump in Wall Street, with traders awaiting cues on interest rates from the U.S. Federal Reserve's two-day policy meet.

The S&P/ASX 200 index .AXJO fell 0.5% to finish at 6,795.20. The benchmark ended 0.8% higher on Tuesday.

Fed policymakers are likely to forecast that the U.S. economy will grow in 2021 at the fastest rate in decades, and reiterate their pledge to remain accommodative for the foreseeable future.

However, fears about an overheating economy and a jump-forward in interest rate expectations have increased scrutiny on the Fed meeting.

"They are in a very difficult position. If they get the policy wrong it may be very damaging to equity markets," said Brad Smoling, managing director at Smoling Stockbroking.

"My feeling is they will not be able to allow interest rates to rise much further."

Australian energy stocks .AXEJ closed 1.2% lower, after earlier marking its biggest percentage loss in a week, as the sector was hit by a fall in oil prices.

Oil Search OSH.AX declined nearly 3%, while Santos Ltd STO.AX ended 1.2% lower.

Miners .AXMM finished 1.4% weaker on lower copper prices, with global miners BHP Group BHP.AX and Rio Tinto RIO.AX each closing down over 1%.

The gold index .AXGD snapped two sessions of gains to close 1.4% lower as bullion prices weakened against a stronger U.S. dollar.

Medusa Mining MML.AX and Dacian Gold DCN.AX closed down 6% and 5%, respectively.

Meanwhile, technology stocks .AXIJ mirrored an overnight rise in the tech-heavy Nasdaq index .IXIC to climb 0.7%, marking its second straight day of gains. Afterpay APT.AX ended over 1% higher, while WiseTech Global WTC.AX settled over 3% up.

New Zealand's benchmark S&P/NZX 50 index .NZ50 fell 0.5% to finish the session at 12,622.21.

Top losers were Sanford Ltd SAN.NZ, shedding 7.6%, and Contact Energy CEN.NZ losing 4.5%.

(Reporting by Nikhil Subba in Bengaluru, Editing by Sherry Jacob-Phillips)

((Nikhil.Subba@thomsonreuters.com; Reuters Messaging: Nikhil.Subba.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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