Australian shares fell on Monday after three straight sessions of gains, as index heavyweight banks retreated and mining stocks declined on weak underlying commodity prices.

The S&P/ASX 200 index fell 0.5% to 8,222.2 points by 2334 GMT in thin year-end trading.

The benchmark has risen 8.4% so far this year, heading for a second straight session annual gain, even though investors were worried about an uneven economic recovery in Australia’s top trading partner China.

Financials fell 0.6% on Monday after three straight sessions of gains, with the “Big Four” banks down between 0.1% and 0.5%.

Investors expect the Reserve Bank of Australia (RBA) to start the interest rate-cutting cycle in its first policy meeting of 2025.

JP Morgan analysts expect a quarter-point rate cut in February following the RBA’s dovish tilt and December meeting minutes.

Australian miners inched 0.1% lower after a decline in China’s steelmaking output sent iron ore prices to a more than five-week low on Friday.

Mining giants BHP dropped 0.1%, Fortescue slipped 0.3%, while Rio Tinto rose 0.3%.

Australian shares fall as miners offset real estate and healthcare gains

Bucking the trend, energy stocks climbed 0.7% and were on course for a fifth straight session of gains, after oil prices closed higher on Friday buoyed by a large drawdown in US crude oil inventories. Woodside rose 1% and Santos gained 0.8%.

Gold stocks retreated 0.2% on weaker bullion prices.

Northern Star Resources fell 0.5%, while Evolution Mining added 0.2%.

New Zealand’s benchmark S&P/NZX 50 index fell 0.2% to 13,172.3 points after a four-session winning streak.