Australian shares edged lower on Tuesday, led by losses in the...

Australian shares edged lower on Tuesday, led by losses in the financial sector as markets were largely resigned to the prospect of the Reserve Bank of Australia keeping rates steady at its policy meeting later in the day.

The S&P/ASX 200 index (xjo) was down 20.68 points, or 0.4 percent, at 5408.8 by 0240 GMT, pulling back slightly from a 1.1 percent gain on Monday.

"The market is marking time to see the results from the Reserve Bank," said James McGlew, executive director of corporate stockbroking at Argonaut.

"The chance of another rate cut is very slim indeed. I think the markets would be very surprised if there is a rate cut today."

A Reuters poll showed that the Reserve Bank of Australia is expected to hold interest rates at a record low of 1.5 percent at its policy meeting, the last to be chaired by long-standing governor Glenn Stevens before he retires this month. However, a median forecast favoured one final easing to 1.25 percent during the first quarter of 2017.

Data released on Monday showed company gross operating profits jumping about 7 percent last quarter, handily topping consensus estimates of 2 percent, and reinforcing expectations of the RBA standing pat on rates.

The quarter-point interest rate cut in early August was the central bank's second cut this year and brought down interest rates by a total of 50 basis points (bps).

Moderate gains in energy stocks were offset by losses in financials and healthcare.

Oil explorer Woodside Petroleum (WPL) rose for the second straight day, up nearly 1 percent, as brent crude prices held steady. [O/R]

Coal miner Whitehaven Coal (WHC) was at its highest in over two weeks, up 5.5 percent.

Basic materials were marginally up led Fortescue Metals (FMG) rising 2.5 percent and over half percent gains each by miners BHP Billiton Ltd (BHP) and Rio Tinto Ltd (RIO).

The financial index .AXFJ was a drag on the benchmark, slipping 0.5 percent. Commonwealth Bank of Australia (CBA), the biggest stock on the main index by market cap, lost 0.6 percent and was the worst performer among financials.

Industrials were also hit as toll roads operator Transurban Group (TCL) and rail freight operator Aurizon Holdings (AZJ) shed 1.1 percent and 1.3 percent, respectively.

New Zealand's benchmark S&P/NZX 50 index (nz50) cooled off after hitting a record high in the previous session. The benchmark was flat at 7496.2.

Gains in financials were offset by losses in healthcare stocks.

Healthcare IT provider Orion Health Group (OHE) was the biggest loser on the benchmark, sliding 2.2 percent, while Westpac Banking Corp (WBC) and Australia and New Zealand Banking Group (ANZ) added 0.2 percent and 0.7 percent, respectively.