MELBOURNE: Australian shares fell on Thursday morning, retreating from a two-week closing high as big miners fell on concerns that demand from China, their top customer, could weaken after Beijing said it needed to embrace slower, more sustainable growth.
BHP Billiton dropped 1.8 percent and Rio Tinto fell 1.2 percent, while several smaller miners such as Atlas Iron fell more than 2 percent.
The market has been locked in a tight range between 4,150 and 4,300 since the start of the year, underperforming markets offshore, and appears unlikely to break out of that in the near term with the two biggest sectors, mining and banking, both facing weaker earnings growth.
"With loan books under pressure and commodity prices having softened, that is holding the market back," said Michael McCarthy, chief market strategist at CMC Markets.
McCarthy said moves by the Australian government to claw back planned corporate tax cuts were also adding to uncertainty, deterring investment in the share market.
The benchmark S&P/ASX 200 index fell 15 points to 4,271.9 as of 0123 GMT, down from Wednesday's two-week closing high.
Gold miners also fell out of favour, with top gold miner Newcrest Mining sliding 3 percent as gold prices sank after the Federal Reserve upgraded its US economic outlook. Smaller gold miners Kingsgate and Oceanagold were down more than 5 percent.
The big banks inched up, led by Commonwealth Bank of Australia, which climbed 0.7 percent.
New Zealand's benchmark NZX 50 index rose 1.1 percent to 3,536.6 points, trading at nine-month highs.
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