* Aussie govt expected to forecast record budget deficit
* Insurance Australia Group falls on settling class action
* Newcrest Mining jumps as Toronto Stock Exchange listing approved
By Soumyajit Saha
Oct 6 (Reuters) - Australian shares traded lower on Tuesday, dragged down mostly by financial and healthcare stocks, as investors were reluctant to make big bets ahead of the federal budget and key central bank policy decision.
The S&P/ASX 200 index .AXJO was down 0.38% at 5,919 points, as of 0014 GMT. The benchmark ended 2.6% firmer on Monday.
The major focus for investors is the central bank's policy review later in the day. A Reuters poll of economists showed the bank will likely hold key rates. market is looking down the barrels of two major risk events in the RBA's (Reserve Bank of Australia) rate decision and the federal budget, leading to it exercising caution," said Kyle Rodda, an analyst with IG Markets.
"There is also a little bit of profit-taking at play, after yesterday's rally," he added.
The government is expected to forecast a record budget deficit of around A$200 billion ($142.7 billion) for 2020/21, and include provisions for tax breaks and spending on infrastructure and wage subsidies in the budget. Minister Scott Morrison has repeatedly called this budget the most important since the World War II, as the government tries to lift the virus-ravaged economy out of a technical recession. sectors, financials .AXFJ fell 0.6%, with the so-called "Big Four" banks falling in the range of 0.6% to 1%.
Australia's second-largest insurer Insurance Australia Group IAG.AX fell as much as 1.7% after agreeing to a class action settlement of A$138 million over mis-sold insurance. stocks .AXHJ also fell, with heavyweight CSL Ltd CSL.AX losing more than 1%.
On the other hand, gold stocks .AXGD surged 3% as prices of the underlying commodity rose on U.S. stimulus hopes and against a weakening greenback. GOL/
The country's largest independent gold explorer Newcrest Mining NCM.AX jumped nearly 2% as it received conditional approval to list on the Toronto Stock Exchange. number of issues in the ASX that advanced were 772, while 495 declined.
Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index .NZ50 rose 0.3%, helped by buying in utility and consumer stocks.