(Updates to close)

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Australia-listed shares of Arcadium Lithium ( ARLTF ) at 4-month

high

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RBNZ expected to cut interest rates by 50 bps

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More Chinese stimulus anticipated on Tuesday

By Sneha Kumar

Oct 7 (Reuters) - Australian shares ended higher on

Monday as gains in heavyweight banking stocks outpaced a decline

in top miner Rio Tinto's shares after it confirmed it

was in talks to buy Arcadium Lithium ( ARLTF ).

The S&P/ASX 200 benchmark index closed 0.7% higher

at 8,205.4 points. The benchmark fell 0.8% last week.

Financial stocks rose 1.5%, with the "Big Four"

banks advancing between 1.2% and 2.1%.

"Global funds are buying banks and miners to keep the market

higher," said Mathan Somasundaram, CEO of DeepData Analytics.

Banks are much more liquid and have a bigger weightage

compared to other sectors, and therefore, global funds are

buying them, which is lifting the market, Somasundaram said.

Miners added 0.6%, with bellwethers BHP Group ( BHP )

and Fortescue gaining 0.6% and 3%,

respectively.

Mining stocks have risen for seven out of the last 10

sessions as investors continue to buy into the sector on the

back of China's bazooka stimulus.

China, Australia's largest trading partner, is widely

expected to deliver more stimulus at its official briefing on

economic policy implementation on Tuesday, which is likely to

boost the domestic resources-heavy bourse.

The Australia-listed shares of Arcadium Lithium ( ARLTF )

topped the benchmark, rising 45.7% to end at a four-month high.

The company confirmed that Rio Tinto had offered to

buy it, potentially valuing it at $4 billion to $6 billion or

higher, according to sources.

Rio Tinto, however, lost 2% following its bid.

Tech stocks closed 1.6% higher, tracking their U.S.

peers.

Energy stocks rose 0.2%, while gold stocks

retreated 1.1% on easing prices for the yellow metal.

The Reserve Bank of Australia will release the minutes of

its September policy meeting on Tuesday, which will provide

further clarity on when it's expected to cut rates.

New Zealand's benchmark S&P/NZX 50 index fell 0.2%

to 12,596.87 points. The country's central bank is expected to

cut its interest rates by a half-point in its policy meeting on

Wednesday, according to a Reuters poll.