Aussie shares end lower on dampened US rate cut hopes; NZ flat

Australian shares fell the most in five weeks on Monday as better-than-expected US employment data softened expectations for a Federal Reserve rate cut this month.

The S&P/ASX 200 index slid 1.2 per cent or 79.10 points in lacklustre trading to end at 6,672.20, its biggest one-day drop since June 3. The benchmark firmed 0.5 per cent on Friday.

Stock markets that had rallied on expectations of a US monetary policy easing in July came under pressure on Monday after strong US non-farm payrolls on Friday showed the world's largest economy remained on track.

"The June payrolls number threw a spanner in the works for those participants looking for a 50bp cut to the Federal Funds rate at the upcoming FOMC meeting," ANZ Research said in a note.

"This was the strongest non-farm payrolls print since January this year and suggests the US economy still has firm footing," it added.

Investors will focus on Fed Chairman Jerome Powell's semi-annual testimony to Congress on Wednesday and Thursday for more cues on the near-term outlook for monetary policy.

Mining stocks hit a near three-week trough, leading decliners. BHP Group fell to its lowest since June 18, while rival Rio Tinto Ltd hit a two-week low.

The reduced chances for a Fed rate cut tarnished gold mining stocks, with the sector ending down 0.7 per cent.

In financials, the "Big Four" banks dropped between 0.8-1.2 per cent.

In New Zealand, the benchmark S&P/NZX 50 index closed little changed at 10,605.98.

Local-listed shares of Westpac Banking Corp and Australia and New Zealand Banking Group were the top drags on the benchmark.