* Trading volumes thin ahead of RBA action on Tuesday
* CBA ends 0.6% lower
* NZ ends down after scaling record high earlier (Updates to close)
July 1 (Reuters) - Australian shares closed higher on Monday as an agreement by Washington and Beijing to restart trade talks stoked risk appetite, while the prospects of a local interest rate cut also lent support.
The S&P/ASX 200 index ended up 0.4% or 29.30 points at 6,648.10.
The United States and China agreed on Saturday to resume trade negotiations after U.S. President Donald Trump offered concessions to his Chinese counterpart Xi Jinping when the two met at the sidelines of the G20 summit in Japan.
However, trading volumes were constrained ahead of an interest rate decision by the Reserve Bank of Australia (RBA). A Reuters survey saw nearly 70% of participants expecting the RBA to cut the cash rate at its monthly meeting on Tuesday. The RBA had cut its rate in June, which had then prompted large moves into equities.
Most sectors were trading higher for the session, with heavyweight financial and mining stocks lending most support to the benchmark.
Index heavyweights BHP Group and Rio Tinto ended 1.3% and 1% higher, respectively. The two also had their price targets upgraded by RBC on the basis of stronger base metal prices.
Lithium miner Galaxy Resources was the largest gainer on the ASX 200, closing 7.6% firmer. The stock was the worst performer in the index in the previous quarter.
Financials also rose, with the subindex ending about 0.2% higher. Three of the big four banks closed higher, although Commonwealth Bank of Australia, the largest, eased slightly after adding about 17% over the past quarter. On the other hand, consumer non-discretionary and telecommunication stocks saw some mild unwinding.
Supermarket operator Woolworths Group Ltd closed 0.6% lower, while Telstra Corp shed 0.5%.
New Zealand stocks ended slightly lower after scaling a record high during the session. The index had closed at a record high on Friday.
The benchmark S&P/NZX 50 index dropped 0.3% or 36.57 points to finish the session at 10,464.53.
Meridian Energy, the largest listed electricity retailer in the country, shed 1.5% after scaling a record high on Friday. (Reporting by Ambar Warrick in Bengaluru, Editing by Sherry Jacob-Phillips)