Australian equities slump on U.S. trade tensions with China, Mexico

* Miners, banks among top losers on ASX

* Focus on expected rate cut from RBA meeting on Tuesday

* Gold stocks, real estate gain on defensive appeal (Updates to close)

June 3 (Reuters) - Australian shares ended over 1% lower on Monday, reflecting investors concerns that U.S. President Donald Trump’s aggressive trade diplomacy toward both China and Mexico could tip the United States and other major economies into recession.

The Reserve Bank of Australia (RBA) is expected to cut its policy rate on Tuesday for the first time in almost three years by reducing the cash rate to a record low 1.25 %.

Banks and resources stocks led declines as Australia’s S&P/ASX 200 index closed 1.2%, or 76.4 points, lower at 6,320.5.

Bullion’s safe-haven status helped gold stocks surge 3.8%, with the sub-index making its best close since 2012.

Otherwise the trade war worries hit Australian mining stocks, as China is their biggest customer. Mining stocks and energy units registered heavy losses, with the sub-indices closing 1.5% and 1.8% lower respectively.

Major mining players BHP Group and Rio Tinto lost 2.5% and 3.2%, respectively, while oil and gas heavyweight Woodside Petroleum Ltd finished 2.4% lower.

Lynas Corp lost 5.6% on media reports that suitor Wesfarmers would not hike its takeover offer for the rare earths miner, whose shares had surged 54% in May amid speculation that Beijing is planning to restrict supplies of rare earths to gain leverage in its trade war with United States.

Banking stocks fell 1.4%, with the “Big Four” of the sector registering losses between 0.6% and 1.3%.

Gold miners such as Newcrest Mining and Evolution Mining both surged over 3.6% and among other defensive plays.

Real estate stocks such as Goodman Group and Mirvac Group also closed 1.4% and 2% higher.

New Zealand’s stock market was closed on Monday for a public holiday.

Reporting by Devika Syamnath in Bengaluru; Editing by Simon Cameron-Moore