* Aussie shares drop for three straight monthly sessions
* Material stocks on ASX dragged by softer iron ore prices
* NZ dragged by a2 Milk (Updates to close)
March 29 (Reuters) - Australian shares fell on Thursday, hitting their lowest close in more than five months, with material stocks leading the losses as a slide in iron ore prices hurt sentiment.
The S&P/ASX 200 index fell 0.5 percent, or 30.1 points, to 5,759.4, having declined 0.7 percent on Wednesday. The benchmark has posted a decline of 4.3 percent for the month, its biggest since January 2016 and its third straight monthly loss.
Australian and New Zealand markets are closed on Friday and Monday for public holidays.
A fall in iron ore prices led to weakness in material stocks, especially miners, with the Australian metals and mining index declining 1.2 percent to its lowest in more than three months.
Global miner BHP slipped 1.6 percent, while its rival Rio Tinto Ltd slid 0.9 percent, both closing at their lowest in three months.
Consumer staples were also under pressure, with Australian-listed shares of dairy firm a2 Milk Company Ltd leading the losses, touching a five-week closing low, down nearly 5 percent.
Nestle, the world's biggest packaged food maker, launched a brand of infant formula that uses the protein made popular by a2 Milk Company, The New Zealand Herald reported. [bit.ly/2pMYtQR ]
The New Zealand Herald added that Nestle’s product is available in China, raising concerns the Swiss group’s version could eat into a2 Milk Company’s market share there.
Across the Tasman sea, New Zealand’s benchmark S&P/NZX 50 index fell 0.8 percent, or 69.01 points, to 8,319.07, losing 0.7 percent in March, its second straight monthly session of losses.
a2 Milk Company ATM.NZ fell 4.2 percent to an over five-week closing low, accounting for about half of the losses on the benchmark. (Reporting by Christina Martin in Bengaluru; Editing by Sam Holmes)