The Australian share market has closed lower after the US central bank lifted interest rates and forecast further hikes in the years ahead.
The benchmark S&P/ASX200 index dropped 0.2 per cent to 5,937.2 points, as gains among energy and materials stocks were offset by weakness in all other sectors.
The US Federal Reserve has lifted its benchmark overnight lending rate by a quarter of a percentage point, and forecast at least two more hikes for 2018.
Macquarie Private Wealth division director Martin Lakos said this was the beginning of an extended cycle of monetary policy tightening in US.
"The era of cheap money in the US is slowly done," he said.
"What is more interesting is the expressed view that rates will continue to go up into 2020 - and that has not been factored in at this stage - which has impacted investors."
Stronger base metals prices lifted the local miners, with BHP Billiton up 2.7 per cent to $29.70, Rio Tinto adding 2.1 per cent to $76.78 and Fortescue Metals gaining 0.6 per cent to $4.79.
Oil prices are close to six-week highs, boosted by declines in US inventories, concerns over the nuclear pact with Iran and strong compliance on OPEC production cuts.
"The US inventories number was a positive surprise for oil and OPEC simply wants that higher oil price, and they are prepared to forego some level of production growth to achieve that," Mr Lakos said.
Woodside Petroleum lifted 2.2 per cent to $29.44, Santos gained 1.2 per cent to $5.13 and Oil Search was 0.4 per cent higher at $7.23.
The major banks were a weight on the market, with Commonwealth Bank shedding 1.2 per cent to $74.87, Westpac losing 0.7 per cent $29.60, ANZ dropping 0.4 per cent to $28.18 and National Australia Bank was 0.3 per cent weaker at $29.60.
Sigma Healthcare dropped 7.4 per cent to 81.5 cents after its full-year underlying profit fell 11 per cent, partly on falling demand for Hepatitis C medication.
The Australian dollar hit its highest level for the week, touching 77.86 US cents, as the US dollar slipped when the Federal Reserve did not signal a faster pace of rate hikes for this year, Mr Lakos said.
It fell back gradually after the release of February jobs numbers, which showed another rise in employment, but a slight increase in the unemployment rate due to a higher participation rate.
ON THE ASX:
* The benchmark S&P/ASX200 was down 13.1 points, or 0.22 per cent, at 5,937.2 points
* The broader All Ordinaries index was down 9.9 points, or 0.16 per cent, at 6,043.2 points
* The SPI200 futures contract was down 16 points, or 0.27 per cent, at 5,918 points
* Market turnover was 3.6 billion shares traded worth $6.2 billion.
CURRENCY SNAPSHOT AT 1700 AEDT:
One Australian dollar buys:
* 77.43 US cents, from 76.96 US cents on Wednesday
* 82.01 Japanese yen, from 81.90 yen
* 62.72 euro cents, from 62.77 euro cents
* 54.74 British pence, from 54.94 pence
* 107.14 NZ cents, from 107.21 NZ cents
The spot price of gold in Sydney at 1700 AEDT was $US1,328.00 per fine ounce, from $US1,312.03 per fine ounce on Wednesday.
BOND SNAPSHOT AT 1630 AEDT:
* CGS 4.50 per cent April 2020, 2.0608pct, from 2.0178pct on Wednesday
* CGS 4.75pct April 2027, 2.67pct, from 2.6572pct
Sydney Futures Exchange prices:
* June 2018 10-year bond futures contract was 97.285 (implying a yield of 2.721pct), unchanged from Wednesday
* June 2018 3-year bond futures contract was 97.78 (2.22pct), from 97.825 (2.175pct).
(*Bond market closes taken at 1630 AEDT previous local session; currency closes taken from 1700 AEDT previous local session)