Australian shares were subdued on Tuesday, ahead of a two-day...

Australian shares were subdued on Tuesday, ahead of a two-day U.S. Federal Reserve meeting, in which the central bank is expected to raise its reference interest rate and may also give markets a glimpse of its plans for the coming year.

The S&P/ASX 200 index (xjo), which started off under strong selling pressure, was flat at 5,568.1 by 0140 GMT, as gains in defensive stocks were offset by losses in financials.

The benchmark index has risen 3 percent over the n previous five sessions.

"After a decent run, the first thing to do is take profit and worry later," said Mathan Somasundaram, a quantitative strategist with Baillieu Holst.

"Markets are probably expecting heightened rate rise cycles; we're looking at three to four next year. The Fed will probably talk it down to two. That'll flatten out the yield curve a bit more on a long-term basis and should bring down U.S. dollar and take pressure off everything."

Investors will also be looking to for China's industrial output data for November due later in the day, which is expected to show 6.1 percent growth. ECONCN

The ASX financial index .AXFJ fell 0.3 percent, with Westpac (WBC) and Commonwealth Bank of Australia (CBA) being the biggest drag.

Overnight, U.S. S&P 500 financial sector .SPSY fell 0.9 percent following five consecutive weeks of gains. [.N]

The ASX financial index has risen more than 13 percent since Donald Trump's election victory on Nov. 8, tracking U.S. banks, which gained on expectations that Trump would push lower taxes and reduced regulation - boosting the banking sector.

Defensive stocks including healthcare and consumers counters saw gains, with retail giants Wesfarmers (WES) and Woolworths (WOW) adding 1.3 percent and 0.4 percent, respectively.

Medical device marker ResMed Inc (RMD) added 0.6 percent, while CSL Ltd (CSL) climbed 2.3 percent.

Energy stocks also gained after oil prices hit an 18-month high after OPEC and some non-members agreed to cut output. [O/R]

Woodside Petroleum (WPL) was among top movers on the benchmark energy index .AXEJ.

The ASX mining index .AXMM saw some selling, despite the iron price charging to its strongest in almost three years. [IRONORE/]

Global Miner BHP Billiton (BHP), which has significant oil interests, added 0.6 percent, while Rio Tinto (RIO) fell 1.7 percent.

The number of declining issues was nearly equal to number of advancers on the ASX. <.AD.AX>

For more individual stock activity click on [STXBZ] New Zealand's benchmark S&P/NZX 50 index (nz50) fell 0.2 percent, or 12.480 to 6,863.56.

Losses were led by consumer and healthcare stocks. a2 Milk Company Ltd (ATM) fell 2.6 percent, while Ryman Healthcare (RYM) fell 1.2 percent.