*
Mining sector leads losses on ASX
*
Gold stocks rise as bullion prices jump
*
Australia's April rate-hike decision in focus
(Updates to close)
By Mehr Bedi
March 23 (Reuters) - Australian shares closed lower on
Thursday as investors gauged another quarter-point rate hike by
the U.S. Federal Reserve and its reiteration to remain tough on
sticky inflation, putting the local central bank's monetary
stance under heightened focus.
The S&P/ASX 200 index ended 0.7% down at 6,968.60
points, led by losses in miners. The benchmark closed nearly 1%
higher on Wednesday.
The Fed pencilled in a widely expected increase in borrowing
costs, but recast its outlook to a more cautious stance
following banking upheaval on both sides of the Atlantic,
suggesting it was on the verge of pausing rate hikes.
However, Fed Chair Jerome Powell also hinted at one more
rate increase in 2023, saying the central bank would do "enough"
to tame inflation.
All eyes are now on the Reserve Bank of Australia's policy
meeting due in April, where a rate pause is said to be on the
cards. Traders have priced out further hikes in the cash rate,
and even a slim chance of a cut, but many analysts expect at
least one more rate increase this year. "The RBA seems to be mindful of its mandate and try to limit
pain to one particular borrower," said Henry Jennings, analyst
and portfolio manager at Marcus Today.
"I think we could see them (RBA) pause in April ahead of the
budget."
U.S. Treasury Secretary Janet Yellen told lawmakers that she
had not considered "blanket insurance" for U.S. banking
deposits, further damaging sentiment.
Back home, miners hit their lowest since Nov. 28
with a 1.2% drop, as a fall in iron prices dragged sector majors
Rio Tinto and BHP Group lower. Australian banking stocks shed 0.8%, with the "Big
Four" lenders trading in the red.
Gold stocks rose 1.1% as bullion prices jumped after
the U.S. Fed signalled a rate pause. Gold is traditionally
considered a hedge against inflation, and a low interest-rate
environment makes non-yielding bullion a more attractive bet.
Tech stocks tracked their Wall Street peers lower,
falling 1.1%. New Zealand's benchmark S&P/NZX 50 index finished up
0.1% at 11,594.94.
(Reporting by Mehr Bedi in Bengaluru; Editing by Sherry
Jacob-Phillips)
U.S. earnings diary Wall Street Week Ahead Global Economy Week Ahead ................................................................ For latest top breaking news across all markets ))
