SYDNEY, March 20 - Australian shares fell 0.9 percent on
Thursday morning after Federal Reserve Chair Janet Yellen
rattled investors by suggesting that interest rate hikes may
come sooner than previously thought.
Yellen's comments jolted U.S. bond and stock prices lower,
with Australian equities falling in sympathy as traders
recalibrated the timeline for the Fed's policy
The Fed will probably end its massive bond-buying program
this fall, and could start raising interest rates earlier than
expected, Yellen said in her first news conference as the head
of the central bank.
Simon Twiss, dealer at Arnhem Investment Management said
Yellen's comment was "a little bit more hawkish" than expected.
Global miners BHP Billiton Ltd and Rio Tinto Ltd
dropped 1.1 percent and 1.2 percent respectively.
Fortescue Metals Group also fell 1.1 percent.
"We saw some sell-off in the resources names overnight...so
that will lead us lower," Twiss said. "I just think it seems
that overall weakness in iron ore prices over the last few weeks
is shaking the confidence in those sort of names."
The S&P/ASX 200 index lost 45.3 points to 5,310.3
by 0037 GMT. The benchmark edged up 0.2 percent on Wednesday.
The market has drifted lower in March after rallying 4.1
percent in February, as tensions in Ukraine and disappointing
data from China soured sentiment.
The country's biggest banks were mostly lower, with both
Commonwealth Bank of Australia easing 0.3 percent and
Westpac Banking Corp losing 0.4 percent.
Gold miner Newcrest Mining Ltd plunged 6.9 percent,
after the precious metal fell about 2 percent on Wednesday, its
biggest one-day drop in three months.
Domestic consumer stocks also took a hit, as top Supermarket
chain Woolworths Ltd lost 0.5 percent and Coles-owner
Wesfarmers Ltd dropped 1.2 percent.
Australia's biggest department store Myer Holdings Ltd
dropped 4.5 percent, touching a one-month low earlier,
after it reported a decline in first-half profits and offered a
downbeat outlook for the rest of year.
"It's not a bad report, but it's just flat and subdued. You
need to see growth and growth hasn't been there," said IG market
strategist Evan Lucas.
Lucas said the risk-off sentiment was driving some investors
to relocate to REITS, lifting Westfield Group up 0.2
Australand Property Group climbed 2.0 percent after
Stockland Corporation Ltd bought about 20 percent stake
in the company a day earlier.
New Zealand's benchmark NZX 50 index fell 0.2
percent to 5,146.0
(Reporting by Maggie Lu Yueyang; Editing by Shri Navaratnam)