SYDNEY, AAP – Shares have fallen from record heights as investors reacted to US Federal Reserve officials bringing forward estimates of rising interest rates.

The heavyweight materials category was down more than two per cent, and energy shares lost almost two per cent, after US stocks closed lower.

Most Federal Reserve officials after a two-day policy meeting projected at least two quarter-point interest rate increases in 2023.

The central bank raised economic growth and inflation estimates as the economy surges higher from the depths of the pandemic.

The Fed will continue buying about $US120 billion in bonds each month to support the economy.

Investors rushed to buy the US dollar in expectation of higher rates.

The Australian dollar fell as low as 75.98 US cents.

At 1200 AEST on Thursday, the benchmark S&P/ASX200 index was lower by 28.7 points, or 0.38 per cent, to 7357.5.

The All Ordinaries was down by 35.1 points, or 0.45 per cent, to 7598.3.

In Australia, the unemployment rate unexpectedly dropped to 5.1 per cent in May, returning to its pre-pandemic level.

The move sparked talk that the Reserve Bank of Australia may need to raise interest rates earlier than 2024.

The drop in the unemployment rate from 5.5 per cent in April came as a much larger than expected 115,200 people joined the workforce.

On the ASX, Seven shares surged after the broadcaster’s leaders forecast full-year earnings that exceed analysts’ estimates.

Full-year earnings before interest, tax, depreciation and amortisation are forecast to be between $250 million and $255 million.

The company claimed analysts’ expectations ranged between $235 million and $245 million.

Shares were up about 13 per cent to 46 cents.

Whitehaven Coal shares crashed by 10.29 per cent to $1.83 after it cut its full-year production forecast.

The company said less coal would be produced from Narrabri in NSW due to engineering works.

In mining, BHP dropped 1.57 per cent to $47.61. Fortescue shed 2.61 per cent to $22.35. Rio Tinto dropped 2.13 per cent to $123.02.

Energy shares also had notable losses. Beach dropped 2.73 per cent to $1.33. Woodside and Santos also lost more than two per cent.

There were losses of more than one per cent for shares in consumer staples and utilities.

Financials were the best performing shares and higher by almost one per cent.

ANZ was best of the big four banks and rose two per cent to $29.50.

Bank of Queensland gained 2.39 per cent to $9.18.

The Australian dollar was buying 76.34 US cents at 1200 AEST, lower from 76.92 US cents at Wednesday’s close.