By Aamir Khalid
Australian shares edged lower on Monday as weakness in heavyweight miners and banks offset gains in energy and healthcare stocks, while investors looked ahead to U.S. Federal Reserve policy signals later this week.
The S&P/ASX 200 index ASX:XJO closed 0.2% lower at 8,831.00 points, after briefly trading higher earlier in the session. The benchmark rose 0.9% last week.
Investor appetite for Australian equities wavered as signs of rising oil supply fuelled hopes of easing inflation pressures, while prompting investors to reassess the implications for global growth and commodity-linked sectors.
"Markets lacked a clear lead after U.S. trading was closed on Friday for the July 4 holiday, leaving regional performance mixed," said Philip Pepe, senior equities analyst at Shaw and Partners.
Investors stayed cautious ahead of Fed minutes later this week, looking for signals on the U.S. interest-rate path.
In Sydney, markets are pricing in a 13.5% chance of an RBA rate increase in August, after three hikes this year took the cash rate to 4.35%.
Banks ASX:XFJ fell 0.3%. All the "Big Four" banks traded in the red except National Australia Bank ASX:NAB which was up 0.2%.
Miners ASX:XMM slipped 0.6%, snapping a three-day winning streak, with index giant BHP Group ASX:BHP falling 0.8%.
Energy stocks ASX:XEJ rose as much as 1.5%, their biggest intraday gain in nearly a month. Morgan Stanley analysts said supply risks and geopolitical uncertainty continued to support the sector.
Healthcare stocks ASX:XHJ rose 1.5%, regaining favour after underperforming for much of the previous financial year as investors bought into historically attractive valuations.
The S&P/NZX 50 index NZX:NZ50G gained 1.1% to 13,763.10 points ahead of the Reserve Bank of New Zealand's policy meeting later this week, with markets assigning an almost 80% probability to a rate hike from the current 2.25% cash rate.