Australia Market falls ahead of Fed meeting outcome

The Australian market closed lower on Wednesday, 17 March 2021, snapping three days of winning streak, as investors elected to book recent profit on caution ahead of the outcome of a U.S. Federal Reserve policy meeting, with some investors expecting the central bank to signals to raise interest rates sooner than expected.

At closing bell, the benchmark S&P/ASX200 fell 31.90 points, or 0.47%, to 6,795.23. The broader All Ordinaries shed 30.98 points, or 0.44%, to 7,048.

Australian stocks opened lower as a cautious mood prevailed with investors awaiting the Fed's latest economic growth and interest rate forecasts as well as a press conference by Chairman Jerome Powell. Market participants were speculating Fed officials may signal a rate hike in 2023 amid growing signs of global economic recovery from the fallout of the coronavirus pandemic and progress in COVID-19 vaccine rollouts. The Fed earlier projected interest rates would remain around zero percent through 2023. If the Fed signals such a shift, U.S. yields would rise and negatively affect stock markets.

Energy stocks were lower, hit by a fall in oil prices. Oil Search declined nearly 3%, while Santos ended 1.2% lower.

Shares of miners were weaker on lower copper prices, with global miners BHP Group and Rio Tinto each closing down over 1%.

Shares of tech and telco firms tracked their US counterparts higher as investors awaited news from the US Fed meeting, with Telstra gaining 2.2 per cent to A$3.19 and News Corp's ASX depository receipt touching a record high A$32.59.

CURRENCY NEWS: The U.S dollar traded near flat at 91.860 against a basket of its peers, retreating from an earlier level at 91.968. The Australian dollar slipped 0.14% to $0.7734.

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