Aussie shares tumble after Fed signals fewer rate cuts in 2025

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Fed cuts rates as expected but to slow easing cycle

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ASX 200 hits lowest in more than a month

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Heavyweight banks and miners slump

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NZ50 trims losses after slipping 1.4%

(Updates to market close)

By Nikita Maria Jino

Dec 19 (Reuters) -

Australian shares slipped on Thursday, tracking declines in Asian and Wall Street indices, after the Federal Reserve signalled fewer interest rate cuts for next year.

The S&P/ASX 200 index ended 1.7% lower at 8,162.2 points. The benchmark hit 8,125.7 points, a level last seen on Nov. 5.

The

Fed

lowered rates by a widely expected 25 basis points on Wednesday, but scaled back its projections to two reductions in 2025 from four anticipated in September.

The Fed's hawkish shift sent Wall Street sharply lower, with Asian stocks following suit on Thursday.

After the Fed's announcement, investors trimmed their projections for rate cuts from the Reserve Bank of Australia (RBA) next year, with traders now expecting a 58% chance of a reduction in February, compared to 70% on Wednesday.

Henry Jennings, a senior analyst at Marcus Today, said that he expects the RBA to only cut rates in April 2025, but added that the timing could be brought forward if the economy slows further, or even delayed if government spending ahead of the federal election in May keeps inflation sticky.

On Thursday, Australia's "big four" banks, including ANZ , slid more than 2%, with ANZ's shares tanking to their lowest in five weeks as its CEO gave up a long-term performance bonus amid shareholder criticism.

Miners hit their lowest in three months, with top firm BHP declining 1.5% to its lowest since Sept. 18 and Rio Tinto dipping 0.9%, its lowest since Nov. 28.

Tech stocks tracked their Wall Street peers lower, falling as much as 4.2%.

Energy, gold and healthcare stocks fell 1.7%, 3.3%, and 1.7%, respectively.

New Zealand's benchmark S&P/NZX 50 index ended 0.9% lower after slipping as much as 1.4% earlier in the session.

Third-quarter data showed that the country's economy sank into recession, with economic activity plummeting far more sharply than expected, strengthening the case for bold policy easing. (Reporting by Nikita Maria Jino in Bengaluru; Editing by Sonia Cheema)