* U.S. 2019 rate forecast dampens risk sentiment
* Energy and mining stocks hit by falling prices
* New Zealand pares losses (Updates to close)
By Nikhil Subba
Dec 20 (Reuters) - Australian shares slipped to over two-year lows on Thursday as the Federal Reserve's decision to keep raising U.S. borrowing costs at a time of slowing global growth rattled investors.
The S&P/ASX 200 index .AXJO slumped 1.3 percent to end the day at 5,505.80, its lowest since Dec 8, 2016.
The Fed raised interest rates on Wednesday as expected. While it signalled two rate hikes in 2019, down from three in its previous forecasts in September, policy makers' commitment to keep tightening in the face of slowing growth knocked risk asset markets including Wall Street and Asian stocks. MKTS/GLOB
The dimming outlook for the global economy, coupled with oversupply worries, toppled oil prices and the Australian energy index .AXEJ by 1.8 percent at the close, its lowest since Oct. 20 last year.
Oil and gas company Woodside Petroleum WPL.AX fell 1.7 percent to a more than eight-month low, while Oil Search Ltd OSH.AX lost 1.2 percent, to its lowest since Sept 2017.
Similarly, Australia's mining and metals index .AXMM tumbled 3.2 percent to a one-week low, as stocks were hit by sliding metal prices.
Aluminium prices sank to a 16-month nadir after the United States said it would withdraw sanctions on Russian aluminium producer United Company Rusal 0486.HK and its parent En+ ENPLq.L . MET/L
Aluminium producer South32 S32.AX ended 4.8 percent down, lowest since Dec 12, while mining giant BHP Group BHP.AX , which is heavily exposed to copper markets, fell 1.7 percent.
Financials .AXFJ fell 1.1 percent to its lowest since Feb 10, 2016, with all the 'Big Four' lenders trading in the red.
In New Zealand, the benchmark S&P/NZX 50 index .NZ50 managed to add 0.1 percent to end at 8772.19, after trading the better half of the day lower on data that showed domestic economic growth slowed to a five-year low in the third quarter. Entertainment Group SKC.NZ led gains on the benchmark, rising 2.9 percent, followed by Spark New Zealand SPK.NZ which rose 2.6 percent.