Australian shares declined on Monday as losses in lender Westpac after its quarterly update weighed on financials, offsetting gains in miners ahead of the Reserve Bank of Australia's policy decision. According to reports from Reuters, the S&P/ASX 200 index was down 0.5% at 9,220.30 points as of 0057 GMT, following a 3.2% gain last week. The benchmark's decline came as risk sentiment roughened during a closely watched fiscal 2027 earnings season.
Westpac shares slid more than 5%, marking their biggest intraday drop since March 30, after the lender reported concerning housing credit growth forecasts and mortgage application trends. As reported by Reuters, the Australian lender forecast investor housing credit growth would halve next year and reported a 20% fall in mortgage applications. The bank also reported cash earnings of A$1.8 billion for the quarter ended June 30, down from A$1.9 billion a year earlier.
The decline in Westpac dragged the financials sub-index down 1.9%, with shares of Commonwealth Bank of Australia, ANZ and National Australia Bank falling between 1.3% and 2.4%. According to Reuters, the sub-index posted its largest intraday loss in three months, highlighting the broader impact of Westpac's disappointing results on the banking sector.
Countering the banking sector losses, miners jumped 1.4%, lifted by strong metal prices and providing support to the overall market performance. As reported by Reuters, mining giants BHP Group and Rio Tinto gained above 1% each, while peer Fortescue added 0.7%. The gold sub-index rose more than 3% to its highest level since mid-April, tracking gains in bullion prices, with gold miners Evolution Mining and St Barbara adding 1.3% and 4.7% respectively.
Investor focus will shift to the RBA's decision due on Tuesday, with markets widely expecting the central bank to keep interest rates unchanged while looking for clues on the monetary policy outlook. According to Reuters, in company news, shares of Treasury Wine Estates rose nearly 8% after the Penfolds winemaker said it will reduce the size of its U.S. North Coast vintages from 2026, and write down inventory, mainly bulk wine. The company also forecast its FY26 unaudited earnings before interest, tax, SGARA and material items (EBITS) at A$492.3 million, topping the prior outlook range of A$480 million to A$490 million. New Zealand's benchmark S&P/NZX 50 index also rose 0.5% to 13,892.88 points.
