Australian shares closed marginally higher on Tuesday, as gains in financials and real estate stocks outweighed losses in gold and mining stocks, while investors awaited U.S. economic data and the Federal Reserve's monetary policy meeting this week.

The S&P/ASX 200 index rose 0.1% to close at 6,780.7. The benchmark declined for a third consecutive month, falling 3.8% in October.

The Fed is expected to leave policy rates on hold at the end of its two-day meeting that starts Tuesday. Market participants will focus on the message from policymakers to gauge the interest rate outlook.

Locally, investors await the Reserve Bank of Australia's (RBA) meeting on Nov. 7. Higher than expected third-quarter inflation and September retail sales have added to the case for a rate hike.

"For me the data has been strong enough to warrant an RBA rate hike and I do think they will raise rates on Tuesday (next week)," said Tony Sycamore, market analyst IG Australia.

Manufacturing activity in Australia's largest trade partner China's unexpectedly contracted in October, underlining the challenge facing policymakers trying to engineer a durable economic recovery.

Financials rose 0.7%, with the country's "big four" banks losing between 0.4% and 0.7%.

Real estate shares climbed 1.1%, with property major Goodman Group adding 1.3% to the sub-index.

Heavyweight miners declined 1.3%, while majors BHP Group and Rio Tinto fell 1.4% and 0.6%, respectively.

Gold stocks fell 1.6%, with top gold miner Northern Star Resources losing 3.3%.

In New Zealand, business confidence surged in October. A bounce in most activity indicators came after a national election which resulted in the Labour government losing power.

The benchmark S&P/NZX 50 index rose 0.2% to close at 10,757.69. (Reporting by Ayushman Ojha; Editing by Mrigank Dhaniwala)