Australian shares edged up on Wednesday, supported by financials and energy stocks, while investors turn their focus to the U.S. Federal Reserve's meeting that is expected to give clues about the pace at which it will likely lower interest rates this year.

The S&P/ASX 200 index was up 0.2% at 7,720.1 points by 1208 GMT, on track for a third day of gains, if trend holds. The benchmark closed 0.4% higher on Tuesday.

In line with market's expectations, the Reserve Bank of Australia (RBA) held rates steady on Tuesday, signalling an easing in its hawkish tone from February meeting minutes.

"The board is not ruling anything in or out," the RBA said in a statement, compared with its previous note citing "a further increase in interest rates cannot be ruled out".

Financial markets are now considering the chance that the Fed might reduce the number of projected rate cuts this year to two from three on the back of last week's stronger-than-expected U.S. inflation data.

Back in Sydney, financial stocks weighed in on the bourse, rising 0.4% with the "Big Four" banks adding between 0.4% and 0.8%.

Trailing behind, energy stocks advanced nearly 1% to a month-high on oil prices rising to multi-month highs for the second straight session after attacks on Russian refineries raised concerns regarding global petroleum supplies.

Sector majors Woodside Energy and Santos added 1.1% and 0.5%, respectively.

Miners edged 0.1% higher, with iron prices to a near one-week high amid growing interest for stockpiling in top consumer China. Top miners BHP Group, Rio Tinto and Fortescue rose 0.4%, 0.6% and 1.3%, respectively.

Gold stocks slid 2%, as bullion prices receded on a strong dollar.

Shares of Northern Star Resources and Evolution Mining lost 2.1% and 1.8%, respectively.

Among company news, South32 retreated as much as 3.5% to a one-month low after the company withdrew its fiscal 2024 forecast for Australian manganese production.

New Zealand's benchmark S&P/NZX 50 index fell 0.1% to 11,803.42 points.

 

(Reporting by Sneha Kumar in Bengaluru; Editing by Sherry Jacob-Phillips)