Updates throughout with RBNZ decision

By Sneha Kumar

July 10 (Reuters) -New Zealand shares were little changed onWednesday after the country's central bank kept its benchmark rate at a 16-year high as expected, while Australian shares were dragged down bya drop in heavyweight mining stocks.

New Zealand's benchmark S&P/NZX 50 index .NZ50 was largely unchanged at 11,848.22 points.

It was largely flat even before theReserve Bank of New Zealand signalled rates needed to stay higher for longer but said it was open to policy being more restrictive depending on inflationary pressures.

It is hard to say if there will be a rate cut later in the year but we can hope that inflation continues to trend downwards in the second half, said Tom McBride, financial advisor at Hamilton Hindin Greene.

Australian S&P/ASX 200 index .AXJO fell 0.4% to 7,799.9 points, after closing 0.9% higher on Tuesday, as a drop in commodity prices pulled mining stocks .AXMM down 1% to their lowest since July 3.

Mining giants BHP BHP.AX, Rio Tinto RIO.AX and Fortescue FMG.AX dropped between 0.7% and 1.2% as iron ore prices fell on subdued demand from top customer China. IRONORE/

Meanwhile, Federal Reserve Chair Jerome Powell offered little hints on the timing of U.S. rate cuts expected later this year, even as he signalled greater confidence that inflation was coming to heel.

The Australian financials sub-index .AXFJ was down 0.1%, with three of the "Big Four" banks losing.

Reporting by Rajasik Mukherjee and Sneha Kumar in Bengaluru; Editing by Mrigank Dhaniwala and Savio D'Souza

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