SYDNEY: Australian shares fell 0.8 pct in morning trade on Thursday, pulled down by losses in US stocks and weaker metal prices after US Federal Reserve Chairman Ben Bernanke gave a cautious economic outlook but stopped short of signalling more stimulus.
"The failure of the US markets to head higher and in fact go lower was bad news," said CMC Markets chief market strategist Michael McCarthy.
"We were hearing talk that there was a large trade put on in US Treasury futures ahead of the announcement from the Fed Chairman Bernanke overnight, and when he didn't suggest a further quantitative easing program that position was unwound and that had a knock-on effect to other markets," he added.
Shares in Australian coal miner New Hope Corp tumbled as much as 10 percent after it scrapped plans to sell itself for more than $5 billion, before paring its losses.
The benchmark S&P/ASX 200 index fell 43.3 points to 4,255.2 by 0021 GMT, trading at its lowest levels since Feb. 21. The benchmark rose 0.8 percent on Wednesday.
New Zealand's benchmark NZX 50 index was flat at 3,323.3.
STOCKS ON THE MOVE
Woolworths gained 0.4 percent after posting a modest 3.2 percent rise in first-half earnings, close to analysts forecasts. Australia's top supermarket chain said it expects trading to remain subdued over the rest of the year.
QBE Insurance rose 2.8 percent following reports it was set to buy some units of HSBC's general insurance operations. QBE declined to comment.
Rio Tinto and BHP Billiton fell 1.6 percent and 0.9 percent respectively after copper prices retreated from a two-week high.
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