Australian Shares Retreat From 5-Year High As Broader Markets Decline

   By Rhiannon Hoyle 
 

SYDNEY--Australian shares closed lower, retreating from Thursday's five-year high as global equity markets weakened and investors turned their focus to next week's key Federal Reserve policy meeting.

With no real catalyst Friday to drive prices to fresh highs, the benchmark S&P/ASX 200 index--which peaked intraday at 5252.1 Thursday--ended Sydney trading down 0.4% at 5219.6. The Shanghai Composite and Japan's Nikkei also fell.

Market analysts said national holidays in Japan and China next week likely prompted some investors to lock in profits before the weekend.

"After having had a stellar run all week, Asian markets are losing ground heading into the weekend," said IG market strategist Stan Shamu. "However, with most equity markets still in short-term uptrends, we would prefer to buy the dips as support levels are tested."

Mining companies underperformed, with gold stocks in particular under pressure after a drop in precious metal prices. Gold futures fell to a four-week low in New York Thursday as upbeat U.S. labor market data reinforced expectations that the Federal Reserve would curb its bond-buying effort.

Investors are cautiously positioning themselves for a potential shift in the Federal Reserve's monetary policy at the Sept. 17-18 policy meeting, which some market participants believe will kick off a winding down of the Fed's US$85-billion-a-month bond-buying program.

Newcrest Mining Ltd. (NCM.AU), Australia's largest listed gold miner, fell 1.7% Friday, while rival Silver Lake Resources Ltd. (SLR.AU) fell 7.9%.

The country's largest miners, BHP Billiton Ltd. (BHP.AU) and Rio Tinto PLC (RIO.AU), dropped 1.0% and 1.7% respectively.

Write to Rhiannon Hoyle at [e-mail]

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