News: XEJ Mining stocks lead Australian shares higher ahead of cenbank meeting

	  United Malt tops gains in ASX 200 

	  Mining stocks hit highest level in over a week 

	  RBA's policy meeting due on Tuesday 

(Updates to close)

Australian shares closed higher on Monday, led by gains in heavyweight mining stocks, even as investors remained cautious ahead of the central bank's monetary policy meeting where it is expected to raise interest rates by 25 basis points.

The S&P/ASX 200 index (xjo) advanced 0.6% to 7,246.1 points. The benchmark ended 0.1% higher on Friday, logging a 2.3% increase in the first half of the year.

Investors are awaiting the Reserve Bank of Australia's (RBA) policy meeting on Tuesday to assess the trajectory of interest rates. May inflation has eased to 5.6% from 6.8% in April, but well above the RBA's 2-3% target range.

A Reuters poll of economists found that the RBA will likely raise its interest rate by 25 basis points to 4.35%. Since a surprise pause in April and subsequent hikes over the next two months, economists are divided over the RBA's next move.

"We know that the June decision by the RBA to hike was a line-ball decision, and it will be another close call this week," said Tim Waterer, chief market analyst at KCM Trade.

"If the RBA does hike this week, it could dent the momentum of equities in terms of the impact on the growth outlook."

Heavyweight mining index .AXMM gained 1.2% to hit its highest since June 21. Sector majors BHP Group Ltd (BHP) and Rio Tinto Ltd (RIO) rose 0.6% and 0.7%, respectively.

Gold stocks .AXGD advanced 3.0%, with Newcrest Mining (NCM) and Northern Star Resources (NST) rising 2.5% and 3.6%, respectively.

Financial stocks .AXFJ added 0.4%, while energy shares .AXEJ rose 0.8%.

Meanwhile, United Malt Group Ltd (UMG) jumped 8.6%, topping the gains on the benchmark index after agreeing to a A$1.5 billion ($999 million) takeover offer from Malteries Soufflet, a branch of French agribusiness InVivo.

New Zealand's benchmark S&P/NZX 50 index (nz50) closed flat at 11,916.87 points.