[BENGALURU] Australian shares retreated on Monday after hitting a record high earlier in the session, as Covid-19 cases in the populous state of Victoria continued to swell while investors awaited signs of hawkishness in the central bank meeting due this week.

The S&P/ASX 200 index, which crossed the 7,200 mark for the first time ever, closed 0.3 per cent lower at 7,161.6. The index secured an eighth straight monthly gain in May.

Victoria, the epicentre of Australia's latest coronavirus hotspot, reported 11 new cases of community transmission, taking the current cluster to 51. The state's Acting Premier James Merlino warned that the next few days will be "critical".

Energy stocks, which gained 2.2 per cent over the previous week, were the worst performers on the benchmark. The sub-index closed 1.6 per cent lower and marked its worst session in more than a week.

The Australian central bank is expected to hold rates on Tuesday at record low for a sixth straight meeting, while the vast majority of the respondents expect no change to the cash rate until mid-2023.

"In last few weeks, we have seen the Bank of Canada and the Reserve Bank of New Zealand start to move a little away from their very accommodative stances. With Australia, it probably won't happen this time, but will be interesting to watch out for some of the wordings," said Damian Rooney from Argonaut.

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Financials closed 0.6 per cent lower, with the so-called "Big Four" banks closing in the red.

Tech stocks were dragged lower by losses in Link Administration and Nuix.

Link, Pexa's largest shareholder, ended 6.2 per cent lower after the company said it would take the online real-estate firm public.

Macquarie-backed Nuix sunk to yet another record low after cutting its outlook for the second time in a little over five weeks.

Domestic gold stocks, however, rose 1.5 per cent on the back of strong bullion prices, with heavyweight Newcrest Mining gaining 0.6 per cent.

New Zealand's benchmark S&P/NZX 50 index closed 1.1 per cent higher at 12,320.72.

A2 Milk Company dropped 23.4 per cent in May, their worst monthly decline since early 2009, as the dairy producer slashed its annual 2021 sales forecast for the third time earlier this month.

REUTERS