Australian shares ended lower on Wednesday, amid broad weakness in equities globally, after U.S. Federal Reserve officials dampened investors' expectations of aggressive rate cuts soon.
The S&P/ASX 200 index fell 0.26 per cent at the end of trade to 6,640.50 points. The benchmark was 0.1 per cent lower on Tuesday.
Equity markets have rallied this month as investors priced in a rate cut as early as the Fed's July policy-setting meeting, where a 25 basis point cut is being seen with certitude.
However, some market participants were wagering on a half percentage point cut.
St. Louis Fed President James Bullard squashed those hopes on Tuesday, saying he did not think the U.S. economy is dire enough to warrant a 50-basis-point cut in July.
Meanwhile, Fed Chairman Jerome Powell pushed back on President Donald Trump's demand for a significant rate cut.
"Markets got fairly aggressive with its pricing, too," Damien Hennessy, co-founder of Heuristic Investment Systems said earlier in the session, reflecting on the pull-back in shares after the Fed comments.
Australia's financial sector, the biggest on the main board, led the day's losses, with the country's biggest banks falling in a range of 0.2 per cent-1.1 per cent.
The metals and mining index, unaided by a stronger dollar, ended marginally lower. Its biggest constituent BHP Group finished 0.2 per cent lower, while smaller rival Rio Tinto's shares were up 0.8 per cent.
A resurgent dollar, however, pushed gold prices off a six-year peak. Aussie goldRead More – Source
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