Australian shares dip ahead of rate decisions; log best January on record

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Benchmark gains 6.2% in January, best on record

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Most major indexes decline on Friday

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U.S. Fed and RBA decision in focus

(Updates to close)

By Nausheen Thusoo

Jan 31 (Reuters) - Australian shares inched lower on Tuesday for a second consecutive day weighed by miners, ahead of U.S. Federal Reserve and local central bank's policy decisions, although the benchmark logged its best January on record.

The S&P/ASX 200 index eased 0.1% to finish at 7,476.700 points. For the month the benchmark gained 6.2%, its best January since the index was launched in April 2000.

Investors are focused on the Fed's Jan. 31-Feb. 1 policy meeting, where a quarter-point hike - the smallest since the tightening cycle began 10 months ago - is being pencilled in, as evidence of cooling inflation and slowing economic growth mounts.

Meanwhile, Reserve Bank of Australia is expected to raise the interest rate by 25 basis points next week, with a sharp drop in December retail sales suggesting less need for further policy tightening.

"We may be starting to see the first signs that monetary tightening is starting to weigh on consumption," Tapas Strickland, head of market economics at National Australia Bank, said in a note.

Strickland expects a quarter-point rate hike next Tuesday, and another similar hike in March, with the central bank seen pausing thereafter.

The benchmark index made considerable strides over the first month of the year, gaining for 14 of the 20 trading days, with miners doing the heavy lifting on optimism from reopening in top commodity customer China.

"There can be a pullback in the short-term for commodity prices, but if the upward momentum continues miners could outperform this year by recording a 63% earnings growth," Jessica Amir, market strategist at Saxo Capital Markets, said.

Miners and gold stocks fell 0.9% and 2%, respectively. Tech stocks and energy stocks lost 1.3% and 0.3%, respectively.

Healthcare stocks advanced 1.4%, while financials gained 0.1%.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index fell 1% to 11,967.7200. The benchmark also logged its best January since 2001, advancing 4.3%. (Reporting by Nausheen Thusoo and John Biju in Bengaluru; Editing by Eileen Soreng)