Banks drag Australian shares, overshadowing mining record

Oct 14 (Reuters) - Australian shares edged lower on Tuesday as a fall in banks outweighed a record high in mining stocks, while Rio Tinto hit a two-week high as the miner reported a 6% sequential rise in its third-quarter iron ore shipments, narrowly missing market expectations.

The S&P/ASX 200 index slipped 0.1% to 8,877.80 points by 0007 GMT. The benchmark ended 0.8% lower on Monday.

The mining sub-index on the local bourse advanced 3.5% to a record high on the back of stronger iron ore prices, as upbeat data outweighed concerns over renewed Sino-U.S. trade tensions.

Rio Tinto, the world's largest iron ore producer, saw shares rise as much as 3.8% as its copper output races to the top of its full-year forecast, but warned it would need a strong fourth quarter to attain the lower end of its annual target for iron ore shipments.

Meanwhile, peers BHP and Fortescue rose 2.9% and 2.6% respectively.

Gold stocks also advanced 4.1%, hitting a record high as bullion prices broke through $4,100 per ounce for the first time on renewed U.S.-China trade tensions.

Gold miners Northern Star Resources and Evolution Mining added 4.1% and 3.8% respectively.

Banks, on the other hand, hit over a two-week low, declining as much as 1.4% and weighing on the benchmark, with three of the "Big Four" banks losing between 1.7% and 1.8%.

Discretionary stocks lost 1.8%, while the real estate sub-index fell 1.3%.

Local traders look forward to unemployment figures, due on Thursday, in order to gauge the central bank's upcoming decision on interest rates.

New Zealand's benchmark S&P/NZX 50 index fell 1% to 13,224.46 points.

The Reserve Bank of New Zealand said it planned to ease the mortgage loan-to-value ratio restrictions from December 1 as house prices are now within sustainable estimates after a sustained fall. (Reporting by Shivangi Lahiri in Bengaluru; Editing by Alan Barona)