Australian shares posted their worst session in nearly two weeks on Monday, a day ahead of the central bank policy decision, while the country's biggest gold miner soared on receiving a $16.9 billion buyout offer from Newmont Corp.

The S&P/ASX 200 ended 0.3% lower at 7,539.0 points, snapping three straight days of gains. The benchmark marked its worst day since Jan 25.

The Reserve Bank of Australia (RBA) is expected to deliver a fourth consecutive quarter-point interest rate hike on Tuesday, likely followed by another similar-sized increase in March as it fights an unexpected resurgence in inflation, a Reuters poll showed.

However, "a surprise 50bp hike from the RBA tomorrow could weigh on the ASX 200", said Matthew Simpson, a market analyst at City Index.

Meanwhile, data showed Australian retail sales volume fell for the first time in a year in the December quarter as shoppers cut back spending on goods, a sign higher borrowing costs are finally working to curb spending.

"Weak retail sales in December has become a trend. But if we see continued weakness in January and February, it is a sure sign that consumers are feeling the strain of higher interest rates," said Simpson.

Additionally, data on Friday showed U.S. job growth accelerated sharply last month while the unemployment rate was at its lowest in over half a century, pointing to a stubbornly tight labour market.

Australia's largest gold miner Newcrest Mining jumped as much as 14% after receiving an initial takeover offer from U.S.-based Newmont.

Back home, financials declined 0.3%, marking their worst session since late January. The so-called "Big Four" banks fell between 0.1% and 0.7%.

Tech stocks dropped 0.7%, tracking their Wall Street peers lower. Accounting software provider Xero and ASX-listed shares of Block Inc dropped 1.4% and 2%, respectively. Meanwhile, the miners advanced 0.3% with Fortescue Metals Group, BHP Group and Rio Tinto rising between 0.05% and 0.9%.

Gold stocks closed 2% higher after bullion prices regained some ground.

Markets in New Zealand were closed for a pubic holiday. (Reporting by Echha Jain in Bengaluru; Editing by Dhanya Ann Thoppil)