* Fed's cautious stance on rate-hike outlook support risk appetite
* Commodities prices surge
* Australia shares still underwater for 2016
SYDNEY/WELLINGTON, March 18 (Reuters) - Australian shares scaled a 10-week peak on Friday as a bounce in key commodities prices lifted mining and energy stocks, while New Zealand market extended its weeks-long march higher.
Overnight, the prices of major export commodities like oil and copper hit their highest levels in months after the U.S. Federal Reserve said it would raise rates at a slower pace than planned, prompting hopes of a pick-up in demand. S&P/ASX 200 index .AXJO rose nearly 1 percent in early trading but levelled out as profit-takers cashed in the gains, to be up 13 points, or 0.3 percent, at 5,181.1 by 0101 GMT. Although U.S. and Asian indexes entered positive territory for the first time in 2016, the Australian benchmark is still down 2 percent for the year so far.
"You had everything up overnight, and then a good lead out of the U.S., but now everybody's taking profit," said Mathan Somasundaram, a strategist at Baillieu Holst.
"There has been a bounce, but the strength and duration of the bounce has been quite surprising," Somasundaram added, referring to the resources sector.
Global miner BHP Billiton (LON:BLT) BHP.AX led its sector higher, up 4.5 percent, while rival Rio Tinto (LON:RIO) RIO.AX added 3 percent after announcing a CEO changeover a day earlier. Iron ore major Fortescue Metals Group FMG.AX surged 5.5 percent, the second biggest gainer on the benchmark.
Energy stocks rose nearly as much, with Woodside Petroleum WPL.AX , Origin Energy ORG.AX and Santos STO.AX all up more than 2 percent.
The big banks were mixed. Commonwealth Bank of Australia CBA.AX rose 0.7 percent and Australia and New Zealand Banking Group ANZ.AX was up 0.5 percent, while Westpac Banking Corp WBC.AX and National Australia Bank NAB.AX were flat.
Boutique retailer Premier Investments PMV.AX jumped 5 percent after reporting a 26 percent rise in half year net profit. Zealand's benchmark S&P/NZX 50 index .NZ50 rose 0.2 percent or 13 points to 6,586.43 as investors were cheered by gains on Wall Street.
The biggest gainers included Kiwi Property Group KPG.NZ , up 1.5 percent, after it said its financial result for the year ending March 31 was expected to contain a significant property revaluation gain.
Telecommunications company Spark SPK.NZ added 1.2 percent as investors continue to turn to high yielding stocks in a low interest rate environment.
Oil refiner New Zealand Refining NZR.NZ remained under pressure, down 1.9 percent. A day earlier, it reported disappointing throughput data for the first two months of the year.
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