* Fed affirms dovish stance
* Aussie financials on track for tenth consecutive declines
* New Zealand Q4 GDP expands 0.6 pct QOQ
By Shanima A
March 21 (Reuters) - Australian shares declined on Thursday after the U.S. Federal Reserve’s sharp dovish shift stoked concerns over the global growth outlook, putting a dampener on initial enthusiasm sparked by the accommodative policy stance.
The S&P/ASX 200 index dropped 0.3 percent or 18.8 points to 6,146 by 0134 GMT, having slipped 0.3 percent on Wednesday.
Adding to the cautious mood, U.S. President Donald Trump warned that Washington may leave tariffs on Chinese goods for a “substantial period” to ensure Beijing’s compliance with any trade deal.
The trade war has roiled financial markets for much of the past year and has already affected global factory activity and trade, a point underscored by the Fed at its policy review on Wednesday.
The Fed surprised markets by abandoning all plans to raise rates this year, and plans to stop running down its balance sheet in September, some months earlier than many had expected.
The local financial stocks index was headed for its tenth straight session of declines, with the Big Four banks falling between 0.4 percent and 0.8 percent.
Morgan Stanley in a note on Thursday said an earnings recession is likely in Australia for the non-resource sectors as domestic factors weigh.
“Our base case is for a continued grind down in overall activity with recession risks rising. We cut our 2019 GDP forecast further to 2 percent from 2.2 percent to remain well below consensus,” said Morgan Stanley.
Other sectors in the red included the real estate index , off 0.6 percent, while the consumer staples sector gave up 0.8 percent, with Treasury Wine Estates Ltd and Bellamy’s Australia Ltd among top percentage decliners.
Building materials supplier Boral Ltd was among the top percentage decliners in the benchmark index, down as much as 3.6 percent to its lowest level since Feb. 4.
Moving the other way, mining stocks bounced as much as 1 percent, after they suffered their worst one-day loss in over 1-1/2 months in the previous session.
Global miners Rio Tinto and BHP Group rose more than 1.1 percent each.
World’s largest iron ore miner Vale SA said on Wednesday it halted operations at its Alegria iron ore mine in Minas Gerais, putting upward pressure on prices.
Energy stocks were also in the black, supported by the rise in oil prices as U.S. government data showed tightening domestic oil supplies.
Energy giants Woodside Petroleum and Oil Search rose 0.8 percent and 1.3 percent, respectively.
In New Zealand, the benchmark S&P/NZX 50 index eased 0.1 percent or 5.98 points to 9,429.1 at 0010 GMT.
Dairy firm Synlait Milk was the top percentage gainer, putting on as much as 3.4 percent while Auckland International Airport Ltd led losses, falling 3.8 percent.
Reporting by Shanima A in Bengaluru Editing by Shri Navaratnam