* ASX volumes lowest since early Oct in pre-Christmas trade
* Bega Cheese hits near 2-month high on maintaining FY outlook
* Restaurant Brands NZ at record high, buys 70 KFC stores in USA (Updates to close)
Dec 23 (Reuters) - Australian shares declined in thin trade on Monday as mining stocks retreated after a run of strong gains and lower oil prices weighed on the energy sector.
The S&P/ASX 200 index .AXJO closed down 0.5%, or 31.20 points, at 6,785.10, with volumes at their lowest level since early October. The benchmark slipped 0.3% on Friday.
The metals and mining sub-index .AXMM fell 1.3%, after clocking two straight weeks of gains.
BHP Group Ltd BHP.AX , the world's biggest miner, fell 1.3%, while rival Rio Tinto (LON:RIO) Ltd RIO.AX lost 1.8%. Australia's No. 3 iron ore miner Fortescue Metals Group Ltd FMG.AX declined 1.2%.
Gold stocks .AXGD lost 0.8% as investors booked profits after a recent rally. The index rose 3.5% last week, clocking its best weekly gain since late September.
Sector heavyweight Newcrest Mining Ltd NCM.AX slipped 0.7%, while smaller peer Saracen Mineral Holdings Ltd SAR.AX fell 3.6%.
Shares of Northern Star Resources Ltd NST.AX closed down 0.8%, after falling up to 3.5% during the session.
Northern Star said it was aware of proceedings filed against some of its units over a joint venture agreement dispute. It said the proceedings were not material and would be defended. and gas companies Woodside Petroleum Ltd WPL.AX and Oil Search Ltd OSH.AX lost 0.3% and 1.2%, respectively, as crude prices slipped. O/R
Dairy products maker Bega Cheese Ltd BGA.AX hit a near two-month high and was the biggest gainer on the bourse after it maintained its fiscal 2020 earnings outlook. the main index, rare earths developer Arafura Resources Ltd ARU.AX ended up 3.5% after it said it struck a preliminary deal with a U.S. company for the latter to process its rare earths product.
The ASX is set to close early on Tuesday and will remain closed for two days from Wednesday for Christmas and Boxing day.
New Zealand's benchmark S&P/NZX 50 index .NZ50 rose 0.6%, or 64.94 points, to finish the session at an all-time high of 11,547.23.
Restaurant Brands New Zealand Ltd RBD.NZ firmed 6.5% to a record close and was the best performer on the benchmark after the food retailer said it would buy 70 stores of KFC U.S. franchisee in Southern (NYSE:SO) California.