U.S. CPI and Fed policy decision awaited Mining stocks fell...

	  U.S. CPI and Fed policy decision awaited  

	  Mining stocks fell 0.9%  

	  Energy stocks 1% in green  

(Updates to close)

Australian shares closed at a seven-session low on Wednesday as investors exercised caution ahead of key U.S. consumer inflation data and the Federal Reserve's rate decision due later in the day.

The S&P/ASX 200 index (xjo) closed 0.5% lower at 7,715.5 points.

Market participants expect the U.S. central bank to keep interest rates steady. Policymakers' updates to interest rate expectations will be closely watched for the near-term rate policy.

"ASX (Australian Securities Exchange) investors are taking their chips off the table as a broad-based sell-off hits ahead of a potential inflection point in the financial world," Hebe Chen, market analyst at IG Markets said.

Hawkish comments at the Fed meeting could possibly suggest that the Reserve Bank of Australia (RBA) might avoid easing its monetary policy when it meets next week.

In Sydney, mining stocks .AXMM fell 0.9%, with behemoth BHP (BHP) slipping 0.8%. Rio Tinto (RIO) and Fortescue (FMG) fell 1.4% and 1.3%, respectively.

"If the (U.S.) CPI is worse than expected, we could see another leg down in commodities," Henry Jennings, senior market analyst at Marcus Today said, pointing towards existing weakness in resources.

Rate-sensitive financial stocks .AXFJ fell 0.4%, with three of the "Big Four" banks losing between 0.3% and 0.7%. However, shares of Westpac Banking (WBC) closed largely unchanged.

Gold stocks also closed in the red, slipping 0.3% to the lowest since early April as bullion prices fell on a stronger U.S. dollar.

Bucking the trend, energy stocks .AXEJ gained 1%, tracking higher oil prices on upbeat demand trends.

Energy major Woodside Energy (WDS) was up 2.7% at close of trade.

Across the Tasman Sea, New Zealand's S&P/NZX 50 index (nz50) closed 0.4% lower at 11,741.88 points in its fifth consecutive session of losses.