* Miners see profit taking after 6% rally last week
* Local trading volumes at lowest in 3 weeks (Updates to close)
June 17 (Reuters) - Australian shares ended lower on Monday as investors took profits on heavyweight mining stocks after a strong rally last week, but sentiment was largely subdued ahead of a U.S. Federal Reserve meeting later in the week.
The S&P/ASX 200 index .AXJO fell 0.35% or 23.10 points to 6,530.90 at the close of trade, with trading volumes at their weakest in three weeks. The benchmark rose 0.2% on Friday.
The metals and mining subindex .AXMM ended about 1.2% lower, falling from a near 8-year high touched on Friday. A rise in commodity prices on the back of supply concerns had seen the index rising about 6% last week.
The index clocked its worst session in two weeks.
Diversified miner BHP Group BHP.AX ended 0.4% lower, while peer Rio Tinto (LON:RIO) RIO.AX closed down 1.4%. The two are largest stocks by market capitalisation on the ASX 200, with BHP at the top.
Diversified miner South32 S32.AX lost about 4.2% after it lowered the estimated coal reserves at its Illawarra Metallurgical Coal project. Group Ltd VOC.AX , the country's fourth-largest internet provider, ended nearly 25% lower after AGL Energy AGL.AX dropped its $2.1 billion offer for the company. Vocus was the largest loser on the ASX 200, while AGL rose about 1.6%. stocks .AXFJ edged higher, with three of the big four banks adding 0.2% to 0.5%. National Australia Bank NAB.AX bucked the trend, losing about 0.3%.
Recent capital framework changes for Australian banks have been largely perceived as positive by investors, on the prospect of higher capital levels allowing them to offset a potential increase in loan losses bought about by a recent interest rate cut in the country.
However, wealth manager stocks weighed on the financial subindex, particularly after increased regulatory pressure on AMP Ltd AMP.AX and weak outlook from Challenger Ltd CGF.AX pointed to further headwinds for the sector.
AMP ended 1% lower, while Challenger lost 2.6%.
New Zealand stocks ended lower, with utilities and industrial stocks weighing the most.
New Zealand's benchmark S&P/NZX 50 index .NZ50 fell 0.6% percent or 65.11 points to finish the session at 10,170.260.
Electricity retailer Meridian Energy MEL.NZ ended 1.7% lower and Auckland International Airport AIA.NZ dropped 2.1%.
Both stocks had scaled record highs last week.