March 20, 2019 / 6:09 AM / 3 months ago

Australia shares slip as markets nervous before Fed; NZ down

* Miners tumble after iron ore prices fall nearly 6 pct

* Financials fall for ninth straight session

* Fonterra, Synlait Milk fall after H1 results disappoint (Updates to close)

March 20 (Reuters) - Australian shares ended lower on Wednesday after reports of tension in Sino-U.S. trade talks soured sentiment, while the overall mood was also cautious before the outcome of a U.S. Federal Reserve policy meeting.

The S&P/ASX 200 index declined 0.32 percent, or 19.5 points, to 6,165.3 at the close of trade. The benchmark was little changed on Tuesday.

Investors were already on the defensive after Bloomberg reported that some U.S. officials are concerned that China, Australia’s largest trading partner, is pushing back against American demands in trade talks.

Broad risk appetite was also kept in check ahead of the outcome of the Fed’s policy meeting later in the global day, with markets expecting the central bank to stick to its ‘patient’ approach to rate hikes.

However, some analysts flagged the risk of the Fed adopting a less dovish stance than what markets are hoping for.

“Positivity about risk that drove the rally from late December and early January could be bookended by Wednesday’s FOMC meeting being a little less dovish than folks think,” said Greg McKenna, strategist at McKenna Macro in a note.

Mining stocks which had clocked a stellar performance in the previous two sessions, tumbled after iron ore prices fell nearly 6 percent, amid expectations of higher supply.

The drop came after Brazil’s Vale SA said a local court had cleared the way for it to resume operations at its largest iron ore mine, which had been halted since early February after a deadly dam collapse.

Fortescue Metals Group Ltd slipped 6.3 percent, while mining heavyweights BHP Group and Rio Tinto lost 1 percent and 2.8 percent, respectively.

Among energy stocks, coal miner New Hope Corp tumbled the most for a second straight day after its half-year results showed profit growth slowing. Shares fell 13.9 percent.

Financial stocks slipped for a ninth straight session, with top lender Commonwealth Bank of Australia losing 0.5 percent.

Funds and asset managers such as Magellan Financial Group , Janus Henderson Group PLC and AMP Ltd lost between 0.7 percent and 2.6 percent.

New Zealand’s benchmark S&P/NZX 50 index fell 0.65 percent or 61.57 points to finish at 9,435.7.

Losses were led by Synlait Milk and Fonterra Shareholders’ Fund, after disappointing first-half results. (Reporting by Rashmi Ashok in Bengaluru Editing by Shri Navaratnam)

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