* Broad-based losses drive Aussie shares lower
* Biggest one-day drop since June 3
* Miners, banks drag down benchmark
* Investors shift focus to Fed chairman's testimony (Updates to close)
By Aditya Soni
July 8 (Reuters) - Australian shares fell the most in five weeks on Monday as better-than-expected U.S. employment data softened expectations for a Federal Reserve rate cut this month.
The S&P/ASX 200 index .AXJO slid 1.2% or 79.10 points in lacklustre trading to end at 6,672.20, its biggest one-day drop since June 3. The benchmark firmed 0.5% on Friday.
Stock markets that had rallied on expectations of a U.S. monetary policy easing in July came under pressure on Monday after strong U.S. non-farm payrolls on Friday showed the world's largest economy remained on track. June payrolls number threw a spanner in the works for those participants looking for a 50bp cut to the Federal Funds rate at the upcoming FOMC meeting," ANZ Research said in a note.
"This was the strongest non-farm payrolls print since January this year and suggests the U.S. economy still has firm footing," it added.
Investors will focus on Fed Chairman Jerome Powell's semi-annual testimony to Congress on Wednesday and Thursday for more cues on the near-term outlook for monetary policy.
Mining stocks .AXMM hit a near three-week trough, leading decliners. BHP Group BHP.AX fell to its lowest since June 18, while rival Rio Tinto (LON:RIO) Ltd RIO.AX hit a two-week low.
The reduced chances for a Fed rate cut tarnished gold mining stocks, with the sector ending down 0.7%. GOL/
In financials, the "Big Four" banks dropped between 0.8-1.2%.
In New Zealand, the benchmark S&P/NZX 50 index .NZ50 closed little changed at 10,605.98.
Local-listed shares of Westpac Banking Corp WBC.NZ and Australia and New Zealand Banking Group ANZ.NZ were the top drags on the benchmark.