* Aussie shares post first monthly gain since August
* Banks drag ahead of Royal Commission's final report
* Fortescue gains on strong Q2 iron ore shipments
(Updates to close)
By Anushka Trivedi
Jan 31 (Reuters) - Financial stocks pulled Aussie shares lower on Thursday as banks fell ahead of a powerful inquiry's final report due next week, offseting optimism stemming from U.S. Federal Reserve's dovish outlook.
The S&P/ASX 200 index .AXJO closed down 0.4 percent or 22.0 points at 5,864.70 but still posted a monthly gain of 3.9 percent, its first since August. The benchmark rose 0.2 percent on Wednesday.
Financial stocks .AXFJ fell 1.5 percent to a near four-week low.
"With the banks, it seems to be the nervousness ahead of the royal commission, while for Janus Henderson, its the news that they're closing more funds. Its a pretty tough place to be", said Damian Rooney, director of equity sales at Argonaut.
The Royal Commission, which has revealed widespread wrongdoing at Australia's top financial institutions, is slated to release its final report on Feb. 4, with investors bracing for unprecedented regulatory attention on some the world's most profitable banks.
The country's "Big Four" banks lost between 1.6 percent to 2.5 percent each on Thursday.
Meanwhile, Australia-listed shares of Janus Henderson JHG.AX JHG.N dropped 3.3 percent after it said on Wednesday it would close down three of its Australian equities funds.
The news comes as other fund managers in Australia have flagged plunge in first-half earnings on increased volatility and equity market sell-offs in the last quarter of 2018.
Elsewhere, mining stocks gained on higher commodities prices and the Fed's pledge to be patient with future rate hikes.
The metals and mining index .AXMM rose 1.0 percent to close higher for a fourth straight session. Buoyed by higher iron ore prices and China's stimulus promise it has added 8.7 percent this month.
The world's biggest miner BHP Group BHP.AX firmed 0.7 percent, while Fortescue Metals Group FMG.AX climbed to a near one and half year high after reporting a 5 percent rise in second quarter iron ore shipments. stocks .AXEJ rose 1 percent, benefiting from a jump in oil prices. O/R
Oil Search ltd OSH.AX advanced 2.2 percent, whereas Beach Energy Ltd BPT.AX posted a 5.6 percent hike.
In New Zealand, the benchmark S&P/NZX 50 index .NZ50 rose 0.7 percent or 59.820 points to finish the session at 8,985.340.
Dairy giant a2 Milk Co ATM.NZ was the top percentage gainer on the benchmark, closing 3.7 percent up.