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Benchmark gains 6.2% in January, best on record
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Most major indexes decline on Friday
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U.S. Fed and RBA decision in focus
(Updates to close)
By Nausheen Thusoo
Jan 31 (Reuters) - Australian shares inched lower on
Tuesday for a second consecutive day weighed by miners, ahead of
U.S. Federal Reserve and local central bank's policy decisions,
although the benchmark logged its best January on record.
The S&P/ASX 200 index eased 0.1% to finish at
7,476.700 points. For the month the benchmark gained 6.2%, its
best January since the index was launched in April 2000.
Investors are focused on the Fed's Jan. 31-Feb. 1 policy
meeting, where a quarter-point hike - the smallest since the
tightening cycle began 10 months ago - is being pencilled in, as
evidence of cooling inflation and slowing economic growth
mounts.
Meanwhile, Reserve Bank of Australia is expected to raise
the interest rate by 25 basis points next week, with a sharp
drop in December retail sales suggesting less need for further
policy tightening.
"We may be starting to see the first signs that monetary
tightening is starting to weigh on consumption," Tapas
Strickland, head of market economics at National Australia Bank,
said in a note.
Strickland expects a quarter-point rate hike next Tuesday,
and another similar hike in March, with the central bank seen
pausing thereafter.
The benchmark index made considerable strides over the first
month of the year, gaining for 14 of the 20 trading days, with
miners doing the heavy lifting on optimism from
reopening in top commodity customer China.
"There can be a pullback in the short-term for commodity
prices, but if the upward momentum continues miners could
outperform this year by recording a 63% earnings growth,"
Jessica Amir, market strategist at Saxo Capital Markets, said.
Miners and gold stocks fell 0.9% and 2%,
respectively. Tech stocks and energy stocks lost
1.3% and 0.3%, respectively.
Healthcare stocks advanced 1.4%, while financials gained 0.1%.
Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50
index fell 1% to 11,967.7200. The benchmark also logged
its best January since 2001, advancing 4.3%.
(Reporting by Nausheen Thusoo and John Biju in Bengaluru;
Editing by Eileen Soreng)
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