* Aussie shares hit lowest since Feb. 26
* Banks and miners account for most losses
* Westpac falls after flagging A$260 mln H1 earnings hit
* Gold stocks gain on safe-haven buying
By Aditya Soni
March 25 (Reuters) - Australian shares neared a four-week low on Monday as investors fled risk-sensitive assets on worries about a looming U.S. recession, but gold stocks gained on safe-haven buying.
Broad-based losses pushed the benchmark S&P/ASX 200 index .AXJO down 1.2 percent, or 71.7 points, to 6,123.5 by 0034 GMT. The benchmark firmed 0.5 percent on Friday.
U.S. Treasury 10-year note yields dropped below three-month Treasury bill yields for the first time since 2007 on Friday after disappointing U.S. manufacturing data, prompting a sell-off on Wall Street as a yield curve inversion is seen as a leading recession indicator.
Jeffrey Halley, Senior Market Analyst at OANDA, said the gloomy U.S. data confirmed that "the global economy is slowing down after a 10-year quantitative-easing-induced bull run."
However, he added that "until the U.S.-China trade talks conclude for better or worse, it is too soon to predict how deep the coming slowdown will be or even when it will occur".
Financials and materials stocks, which collectively account for nearly 60 percent of the benchmark, led declines on Monday.
Top lender Commonwealth Bank of Australia CBA.AX slid 1.5 percent to its lowest level since Feb. 15.
Westpac Banking Corp WBC.AX fell as much as 1.8 percent to a more than five-week low after flagging a A$260 million drop in first-half cash earnings due to provisions for customer refunds in the wake of an inquiry into financial sector wrongdoing. stocks .AXMM , which were also reeling from lower copper prices, were down 1.3 percent at a one-week low.
BHP Group Ltd BHP.AX and Rio Tinto (LON:RIO) Ltd RIO.AX fell 1.8 percent and 1.9 percent, respectively.
Rio on Sunday said it was suspending rail operations in the Pilbara region and mining at the Robe Valley operations in Western Australia as a severe tropical cyclone hit the state's far north. stocks also declined, with benchmark heavyweight CSL Ltd CSL.AX slipping 0.6 percent.
The heightened fears of a global economic downturn fuelled safe-haven buying, pushing gold miners .AXGD 1.9 percent higher.
St Barbara Ltd SBM.AX was the benchmark's top performer, rising 3 percent. Newcrest Mining Ltd NCM.AX climbed 2.6 percent to its highest level since July 2016.
Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index .NZ50 fell 0.5 percent or 49.24 points to 9,501.75. The index closed at a record high on Friday.
Dairy firm a2 Milk Company Ltd ATM.NZ slipped 1.2 percent, while Meridian Energy Ltd MEL.NZ fell 1.6 percent.
Elsewhere, shares of Air New Zealand Ltd AIR.NZ rose 1.9 percent after the airline reported a rise in February passenger load factor and passengers carried.