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March 22 (Reuters) - Australian shares fell on Friday dragged by commodity-linked stocks and banks, while investors digested policy announcements from central banks and stronger-than-anticipated local jobs data this week.

The S&P/ASX 200 index .AXJO closed 0.2% lower at 7,770.60 points, posting its worst day in the week. The benchmark had risen 1.1% on Thursday.

Data on Thursday showed a strong recovery in local employment for February, which led investors to slash their interest rate cut bets to 37 basis points (bps) for the year from 44 bps.

The Australian central bank had held rates steady at a 12-year high of 4.35% earlier this week, but dropped its tightening bias.

"The employment figures may reinforce the Reserve Bank of Australia's message of the labour market being ‘too tight’ but the volatility in the labour market reports in prior months means that investors should be careful in interpolating the implications of one strong month of data," Kerry Craig,global marketstrategist at J.P. Morgan said.

In Sydney, miners .AXMM dropped 1% on Friday, but marked their best week since Feb. 2. Sector majors Rio Tinto RIO.AX, BHP Group BHP.AX and Fortescue FMG.AX fell in the range of 0.5%-2.1%.

Energy stocks .AXEJ dipped 1.3% tracking an overnight fall in oil prices, with Woodside Energy WDS.AX falling 1.8%. However, the subindex also posted its best week since Feb. 2. O/R

Gold stocks .AXGD fell 1.3%, with top gold miners Perseus Mining PRU.AX and Evolution Mining EVN.AX shredding 2.9% and 2%, respectively.

Heavy-weight financials .AXFJ fell 0.2%, with Commonwealth Bank of Australia CBA.AX, National Australia Bank NAB.AX and Westpac Banking Corp WBC.AX shedding between 0.1%-0.8%.

New Zealand's benchmark S&P/NZX 50 index .NZ50 rose 0.5% at 11,978.62 points at close of trade.

Fisher & Paykel Healthcare FPH.NZ rose 5.7%, marking its best day in more than 10 months, after it upgraded forecast for the full year.

(Reporting by Megha Rani in Bengaluru; Editing by Mrigank Dhaniwala)

((Megha.Rani2@thomsonreuters.com;))

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