Australian shares closed lower on Tuesday, dragged by banks after ANZ Group announced one of the sector's biggest job cuts in years, while miners fell as investors booked profits.

The S&P/ASX 200 index closed down 0.5% at 8,803.5 points. The benchmark ended 0.2% lower on Monday.
"Stretched valuations, margin pressure from looming RBA cuts and fresh signals like ANZ's brutal layoffs are prompting investors to lock in profits and reassess the sector’s fundamental health", said Hebe Chen, a market analyst with Vantage Markets.

There is an 86% probability of the Reserve Bank of Australia delivering a quarter-point cut in November, having already cut rates by 75 basis-points this year. It is widely expected to hold rates at its September-end meeting.

Stocks of global mining giants BHP and Rio Tinto , which delivered strong performances last two months, fell 1% and 1.1% as investors booked profits.

BHP said on Tuesday it would pay $72.5 million to settle an Australian shareholder class action related to a deadly 2015 tailings dam collapse in Brazil.