Australian shares tepid as Westpac Banking drags; NZ dips

* Financials set for seventh straight day of losses

* Westpac slips a day after resuming trade

* Gold stocks fall

Nov 5 (Reuters) - Australian shares were subdued on Tuesday ahead of a central bank policy meeting, while losses in Westpac Banking Corp pressured the overall market after the lender flagged weak trading conditions following a lower annual profit.

The S&P/ASX 200 index was trading at 6690.3, as of 0149 GMT. The benchmark ended 0.3% higher on Monday.

Shares in Westpac Banking, the country’s second-largest lender, slipped to their lowest since May 17, and was one of the biggest drags in the ASX 200 index.

The lender on Monday had reported a 15% slide in its full-year cash earnings and cut its dividend for the first time in a decade. It also announced completion of an A$2 billion share placement on Tuesday as it seeks to beef up capital levels amid tougher regulatory requirements.

“Westpac has taken some of the gloss off today but that wasn’t unexpected considering the deep discount the placement was done at,” Henry Jennings, senior analyst and portfolio manager at Marcustoday Financial Newsletter.

Among the other “Big Four” banks, Commonwealth Bank of Australia advanced 1%, while National Australia Bank , which is due to report results on Thursday, added 1.2%.

“We’re obviously expecting to see the same sorts of pressures that we have seen in ANZ and Westpac to play on NAB,” Jennnings said, adding that a dividend cut was a high possibility.

Markets were also focussed on the Reserve Bank of Australia’s policy review due later in the day. Analysts in a Reuters poll expect the central bank to stand pat but cut at least once more early next year to revive inflation and a slowing economy.

Energy stocks advanced 0.8%, with Woodside Petroleum , the country’s biggest oil and gas explorer rising 1.2%, while Oil Search added 0.8%.

The energy sector was set for a third straight day of gains, helped by strength in oil prices on an improved outlook for crude demand after the United States and China signalled progress in trade negotiations.

Trade-sensitive mining stocks also lent support to the local benchmark, with the sub-index rising 0.2%. Major players BHP Group and Rio Tinto added 1.2% and 1.3%, respectively.

Gold stocks dropped 2.5% as increased optimism over a U.S.-China trade deal capped gains for the safe-haven bullion. Newcrest Mining and St Barbara shed 1.8% and 3.7%, respectively.

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index fell 0.1%, or 9.05 points, to 10,792.05.

Local shares of Westpac dipped 3.4%.

Communications infrastructure services provider Chorus Ltd and electricity retailer Meridian Energy strengthened 1.4% and 0.4%, each.

$1 = 1.4516 Australian dollars Reporting by Shriya Ramakrishnan in Bengaluru, Editing by Sherry Jacob-Phillips