March 21, 2018 / 1:30 AM / 2 years ago

Australia shares cautious ahead of Fed; NZ hits record on Synlait earnings

* Aussie shares trade flat, Fed in focus

* Synlait pushes New Zealand to record high

By Christina Martin

March 21 (Reuters) - Australian shares were little changed on Wednesday as losses in real estate firms and telcos offset gains in resources stocks, amid wider investor caution ahead of the Federal Reserve’s policy meeting.

The S&P/ASX 200 index crept 0.02 percent, or 1.2 points, higher to 5,937.6 by 0045 GMT, paring earlier gains. The benchmark fell 0.4 percent in the previous session.

Materials stocks were supported by firmer iron ore prices while a rise in oil prices helped energy firms.

Investors awaited a near-certain interest rate hike at the end of the Fed’s two-day meeting on Wednesday.

Markets have largely priced in three U.S. rate hikes this year, but some analysts suspect the Fed’s ‘dot plot’ of forecasts could shift up to four and spook risk assets.

“The Fed meeting has very well been flagged, the market pricing indicates that everybody is prepared for a rate rise,” said Michael McCarthy, Chief Market Strategist at brokerage CMC Markets.

Australia’s material sector rose as much as 1.5 percent, its biggest intraday percentage gain in more than a week, with heavyweights BHP Billiton Ltd and Rio Tinto Ltd gaining 1.1 percent and 0.6 percent, respectively.

“Metal prices were down but there’s been a turnaround in iron-ore prices today, up by 1.5 percent. It’s one of the reasons why we’re seeing support for BHP and Rio; those two are the major stocks in the material sector, lifting the sector to the top,” McCarthy said.

Financial stocks jumped as much as 0.4 percent, with the ‘Big Four’ banks rising between 0.1 percent and 0.7 percent.

The energy index hit a two-week high, up as much as 1.4 percent, boosted by firm oil prices. Woodside Petroleum added 0.7 percent, while Origin Energy touched its highest in three weeks, up 1.4 percent.

Oil prices rose on Wednesday, supported by tensions in the Middle East and healthy global demand, although rising U.S. output from the United States continued to weigh on markets.

However, limiting gains were real estate and telecom stocks, with Scentre Group down as much as 2.3 percent and Telstra Corp dropping as much as 1.8 percent.

New Zealand’s benchmark S&P/NZX 50 index rose 0.85 percent, or 72.39 points, to a record high of 8,559.54, with consumer staples leading gains.

The biggest advancer on the main index was Synlait Milk , up as much as over 17 percent to a record high after it posted its best first-half net profit.

Reporting by Christina Martin in Bengaluru; Editing by Sam Holmes

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