Australian shares post worst day in six weeks in sector-wide selloff

Australian shares post worst day in six weeks in sector-wide selloff

(Updates to close)

By Himanshi Akhand

Aug 22 (Reuters) - Australian shares fell on Monday, pulled lower by heavyweight mining and financial stocks, as investors locked in gains following five straight weeks of rally in the main index.

The S&P/ASX 200 index .AXJO closed 1% lower at 7,046.90. The benchmark ended flat on Friday.

"I think it is quite a normal pullback," said Brad Smoling, managing director at Smoling Stockbroking, as the market has regained much ground after big falls earlier in the year.

"Having a quiet day to kick off the week is pretty normal, pretty healthy. And I think we're probably gonna have a very strong balance of the year," he added.

Investors are waiting for Jackson Hole symposium later in the week, amid concerns that U.S. Federal Reserve Chair Jerome Powell may not meet hopes for a dovish pivot on policy.

On the domestic bourse, heavyweight banking stocks .AXFJ led the losses with a 1.2% drop. The so-called "big four" banks fell between 1% and 1.7%.

Gold stocks .AXGD slumped 3.4% after bullion prices fell to their lowest in over three weeks on dollar strength and expectations of more rate hikes from the U.S. Fed to tame surging inflation.

Sector major Newcrest Mining NCM.AX slipped 4.4%, while Northern Star Resources NST.AX fell 2.7%.

Mining stocks .AXMM followed suit to end 0.9% lower. Heavyweights BHP Group BHP.AX , Rio Tinto RIO.AX and Fortescue Metals Group FMG.AX fell between 0.3% and 0.5%.

Energy stocks .AXEJ fell 0.9% on weaker oil prices, while technology stocks .AXIJ fell 1.5%.

Across the border, Reserve Bank of New Zealand Deputy Governor Christian Hawkesby said that policymakers want rates to be "comfortably above neutral" to help lower core inflation.

New Zealand's benchmark S&P/NZX 50 index .NZ50 ended 0.7% higher at 11,763.95.
Reporting by Himanshi Akhand in Bengaluru; Editing by Anil D'Silva