News: XEJ Australian shares drop on COVID-19 woes; RBA decision in focus

Sept 6 (Reuters) - Australian stocks fell on Monday as surging COVID-19 cases in the country dampened sentiment ahead of the central bank's September policy meeting where it could announce a decision on the tapering of its pandemic-era asset purchases.

The benchmark ASX 200 index (xjo) fell 1.1% to 7,442.6 by 0032 GMT.

Uncertainty over the Reserve Bank of Australia's (RBA) policy lingered, with analysts undecided on whether the RBA will put off its tapering plans on Tuesday.

That piled on to the pressure already brought about by the country continuing its fight with raging COVID-19 infections, having reported 1,684 new cases on Sunday.

Among individual sectors and stocks, miners .AXMM fell nearly 1%, with iron ore major Fortescue Metals (FMG) dropping 10.8% to be the top loser on both the benchmark and the mining index.

The "Big Four" banks lost about 1% each, in line with the broader financials index .AXFJ that headed for its worst session in a week.

The energy index .AXEJ lost the most on the benchmark, shedding 2.2% on weaker oil prices.

Takeover target Oil Search (OSH) gave Santos Ltd (STO) an extra week to complete due diligence for its proposed A$8.4 billion ($6.25 billion) buyout on Monday.

Bucking the trend, gold stocks .AXGD rose 1.3% on strong bullion prices, with gold miners Northern Star Resources (NST) and Newcrest Mining (NCM) gaining 1.5% and 1.8%, respectively.

In New Zealand, the benchmark NZX 50 index (nz50) fell 0.3% to 13,245.22.

The top percentage losers on the main index were dairy firm A2 Milk Company Ltd (ATM) , down 2.2%, followed by Serko Ltd (SKO) , losing 1.9%.

Elsewhere, Japan's Nikkei .N225 was up 1.4%, while the S&P 500 E-minis futures EScv1 were down 0.2%.

($1 = 1.3439 Australian dollars)