Australian Shares Slip as Westpac Weakness Weighs on Banks Ahead of RBA Decision

Australian shares fell on Monday, with the S&P/ASX 200 down 0.5% at 9,220 as losses in major banks outweighed gains in mining stocks. Westpac plunged more than 5% after warning that investor housing credit growth could halve next year and reporting a 20% decline in mortgage applications.

The weakness spread across the banking sector, sending the financials sub-index down 1.9%. In contrast, miners gained 1.4% as stronger metal prices supported BHP and Rio Tinto.

Markets are now turning to Tuesday’s Reserve Bank of Australia (RBA) decision. Rates are widely expected to remain unchanged, making the central bank’s guidance on future policy particularly important for Australian equities and the currency.

Trader outlook: Bank weakness highlights growing sensitivity to the domestic credit and housing cycle, while stronger miners provide some offset. Traders may focus on the RBA’s rate outlook and guidance for signals on AUD direction, bank valuations and broader equity risk sentiment.