Australia shares slip in choppy trade, investors await US Fed outcome
(Adds analysis, quotes, stocks on the move)
SYDNEY, Sept 18 (Reuters) - Australian shares slipped 0.1 percent in choppy trade on Wednesday, retreating from 5-year highs as investors remained cautious ahead of a decision due by the Federal Reserve on scaling back its stimulus.
The policy-setting Federal Open Market Committee began meeting on Tuesday and many investors expect Chairman Ben Bernanke to announce a reduction of bond purchases by $10 billion a month to $75 billion, while keeping interest rates close to zero.
Gold miners lost ground after bullion fell overnight on muted U.S. inflation data. Australia's top gold producer Newcrest Mining Ltd tumbled 3.2 percent while Beadell Resources Ltd lost 3.6 percent.
Oil and gas companies also pulled the index down as brent crude oil prices settled at a six-week low.
Woodside Petroleum Ltd fell 0.8 percent and Oil Search Ltd fell 1.0 percent.
The S&P/ASX 200 index slipped 5 points to 5,246.2 by 0138 GMT. The benchmark rose 0.1 percent on Tuesday to a fresh five-year closing high.
Trading was relatively subdued, with 160 million shares changing hands by 0134 GMT compared with the daily moving average of 703.8 million shares.
"I think the market is in a bit of a holding pattern," said Simon Twiss, dealer at Arnhem Investment Management, adding that the market will take cues from commentary that will come out of the meeting and how quickly the Fed decides to taper.
Elsewhere, a handful of companies in the defensive sector also slipped. Biotechnology firm CSL Ltd fell 0.8 percent while consumer retail staple Wesfarmers Ltd fell 0.3 percent and top telecommunications provider Telstra Corporation Ltd shed 0.8 percent.
Financials helped to offset broader losses on the index. National Australia Bank rose 0.3 percent, Westpac Banking Corp rose 0.7%, and the Commonwealth Bank of Australia rose 0.5 percent.
The big four banks have maintained a strong rally so far this year as strong profits and high dividend yields have driven their share price up an average of 26 percent each. Comparatively, the broader market rose 12.8 percent over the same period.
"Investors are cautiously awaiting tonight's conclusion to the two-day FOMC meeting," said Tim Radford, global analyst at Rivkin Securities in a note to clients.
"The S&P/ASX 200 struggling to sustain or push above 5,250 points, as it's proving to be a real battleground between bulls and bears."
Overnight, U.S. stocks advanced on Tuesday on expectations the Federal Reserve will make only moderate changes to its stimulus, which has been highly supportive of stocks and other assets, at the conclusion of its two-day meeting.
New Zealand's benchmark NZX 50 index rose 0.2 percent or 8 points to 4,706. (Reporting by Thuy Ong; Editing by Christopher Cushing)