MELBOURNE/WELLINGTON, Aug 2 (Reuters) - Australian and New...

MELBOURNE/WELLINGTON, Aug 2 (Reuters) - Australian and New Zealand shares backed off slightly from recent highs on Tuesday as oil prices fell, with investors wary of a Reserve Bank of Australia board meeting at which it is widely expected to cut rates to a record low.

The S&P/ASX 200 index (xjo) was down 7.5 points, or 0.1 percent, at 5,579.9 by 0208 GMT, logging its first loss in seven sessions.

"There is a bit of a cautiousness ahead of the Reserve Bank meeting this afternoon. The market is pricing in 76 percent chance of a rate cut," said Steven Daghlian, a market analyst at broker CommSec.

"If they don't cut, we could see the market fall away a bit from where it's sitting," he said.

Three of the Big Four banks were flat ahead of the rate decision, while Westpac Banking Corp (WBC) slipped 0.3 percent. Bank profits are set to be squeezed if rates drop further, but that has already been factored in, as bank shares have heavily underperformed the market this year.

Top miner BHP Billiton (BHP) fell while its peers rose, as sliding oil prices weighed on its outlook. Rio Tinto (RIO) rose 0.6 percent a day ahead of releasing half-year results, while South32 rose 0.9 percent on higher coal prices.

Oil and gas producers slumped after oil prices fell below $40 a barrel for the first time since April, with Santos (STO) down 3.5 percent, Woodside Petroleum (WPL) down 1.6 percent and Beach Energy (BPT) off 6.1 percent.

Seven West Media (SWM) was the biggest loser, down 15.5 percent, after warning that its Olympics coverage would drag down annual profit by up to a fifth.

Seven West's news followed a day after Fairfax Media (FXJ) warned it would take a big writedown and weighed on the rest of the media sector, with Nine Entertainment (NEC) down 11 percent and Southern Cross Media (SXL) down 3.4 percent.

New Zealand's benchmark S&P/NZX 50 index (nz50) was largely flat, edging down 9.4 points, or 0.1 percent, to 7,347.25 as investors waited for earnings season to begin.

Telecommunications company Spark (SPK) led losses, falling 1 percent.

Agricultural service provider PGG Wrightson (PGW) rose as much as 10.6 percent, its biggest percentage gain in more than three years, thanks to an upbeat full-year forecast on Monday.

Shares in Fonterra's (FCG) fund (FSF), which provides investor exposure to the farmer-owned dairy exporter, were up 1.9 percent, after the dairy giant on Monday announced a forecast earnings per share range for the 2017 financial year of 50 to 60 New Zealand cents.