* Financials fall after Fed abandons 2019 rate hike plans
* Fed move heightens worries about global economic outlook
* Miners rise after Vale halts operations at mine in Brazil (Updates to close)
By Rashmi Ashok
March 21 (Reuters) - Australian shares ended relatively flat on Thursday with strong gains in mining stocks offsetting losses in financials hit by the U.S. Federal Reserve’s decision to abandon further rate hikes in 2019.
Paring losses just before the bell, the S&P/ASX 200 index rose 0.03 percent or 1.9 points to 6,167.2 at the close of trade. The benchmark slipped 0.3 percent on Wednesday.
The Fed surprised markets by dropping all plans to raise rates this year, stoking concerns about the global growth outlook.
“The fact that they cancelled all rate hike cycles for 2019 tells you that they’re seeing even weaker growth than the market expected,” said Mathan Somasundaram, market portfolio strategist at Blue Ocean Equities.
“If the U.S. is struggling, the rest of the world is going to struggle even more,” he added.
Financial stocks lost as much as 0.9 percent but pared losses to end 0.3 percent lower, tracking their U.S. peers. U.S. financials saw a sharp sell-off in the last hour of trade after the Fed decision.
“It is going to be tough times ahead because banks are not getting higher rates,” Somasundaram said.
“The banks are going to struggle to get returns. Their net interest margins are already under pressure. It is only a matter of time before bad debts start to pick up,” he added.
National Australia Bank lost 0.6 percent while Macquarie Group Ltd shed 1.8 percent.
Among fund and asset managers, AMP Ltd fell 1.4 percent and Perpetual Ltd dropped 2.6 percent.
The losses were offset by a 1.3 percent jump in mining stocks.
Iron prices rose after Vale SA said it would halt operations at a mine in Brazil following an inconclusive stress test.
BHP Group and Rio Tinto rose 1.3 percent and 1.5 percent respectively, while Fortescue Metals Group bounced 2.6 percent.
Energy stocks rose after oil prices hit their highest level in 2019, with gains in Woodside Petroleum and Oil Search.
New Zealand’s benchmark S&P/NZX 50 index rose 0.27 percent, or 25.61 points, to end at 9,461.31. Gaining stocks included dairy firms a2 Milk Company and Synlait Milk . (Reporting by Rashmi Ashok in Bengaluru; editing by Darren Schuettler)