Australia shares take post-Fed breather, retreat from 5-year high
(Adds analysis, quotes, stocks on the move)
SYDNEY, Sept 20 (Reuters) - Australian shares fell 0.4 percent on Friday morning, retreating from a five-year high hit the previous day, as markets took a breather following a rally on the back of the U.S. Federal Reserve's decision to maintain its stimulus programme.
Bellwether miners BHP Billiton Ltd and Rio Tinto Ltd lost 1.1 percent and 1.4 percent, respectively, after Chinese rebar futures touched a seven-week low as supply outstripped demand in the world's biggest steel consumer.
The S&P/ASX 200 index fell 18.5 points to 5,277.1 by 0126 GMT, though it was headed for a 1.1 percent gain on the week, its sixth consecutive weekly gain. The benchmark surged 1.1 percent on Thursday.
The local bourse took its lead from U.S. stocks, which retreated slightly as investors paused after the Federal Reserve's decision to keep its stimulus intact sparked a rally that lifted the Dow and S&P 500 to record highs.
"Everything's kind of settled a bit lower this morning, obviously after the big movement yesterday, we've seen profit-taking as well," said Chris Nelson-Smith, a market maker at City Index.
Stocks with large exposure to the U.S. market slipped as the Australian dollar jumped to multimonth peaks, with blood products maker CSL Ltd falling 0.4 percent and packaging firm Amcor Ltd losing 1.3 percent. A stronger Australian currency erodes overseas earnings when repatriated.
A handful of defensive stocks posted modest gains, helping to cap broader losses. Australia's top telecommunications provider Telstra Corporation Ltd added 0.2 percent and AGL Energy Ltd rose 0.5 percent.
Discovery Metals Ltd climbed 14.8 percent to a one-week high of A$0.13 after agreeing to a $108 million recapitalisation proposal.
Trading was subdued as analysts said investors would stay on the sidelines and reflect on the Fed's surprise decision. A total of 156.6 million shares had traded hands by 0120 GMT, compared with the 1.1 billion shares in the previous session, its highest one-day total since June 21.
"Investors are likely to adopt a wait-and-see stance heading into the weekend," Ric Spooner, chief market analyst at CMC Markets, said in a note to clients.
"One issue for investors in deciding how to position portfolios in response to the Fed decision is that equity markets are already at relatively high valuations."
New Zealand's benchmark NZX 50 index fell 0.5 percent to 4,730.9. (Reporting by Thuy Ong; Editing by Chris Gallagher)