Australian Shares Edge Lower as Westpac Drags Banks Ahead of RBA Rate Decision

Australian stocks moved lower on Monday, August 10, as a sharp decline in Westpac shares pressured the banking sector, offsetting gains among mining companies. Investors were also positioning ahead of the Reserve Bank of Australia’s monetary policy decision, due on Tuesday, with markets largely expecting interest rates to remain unchanged.

The benchmark S&P/ASX 200 index fell 0.5% to 9,220.30 points by 0057 GMT. The index had advanced 3.2% during the previous week, but the latest session reflected renewed caution among investors as companies entered a closely watched fiscal 2027 earnings season.

Westpac was among the biggest drags on the market. Its shares dropped more than 5% during intraday trading, marking their steepest decline since March 30. The fall followed the lender’s quarterly update, which included weaker mortgage application figures and a more cautious outlook for housing credit growth.

Westpac said investor housing credit growth could halve next year and reported a 20% decline in mortgage applications. The bank recorded cash earnings of A$1.8 billion for the quarter ended June 30, compared with A$1.9 billion during the same period a year earlier.

The weakness spread across Australia’s major banks. The financials sub-index dropped 1.9%, recording its biggest intraday decline in three months. Commonwealth Bank of Australia, ANZ and National Australia Bank all fell, with their shares declining between 1.3% and 2.4%.

The banking sector’s performance came as investors turned their attention toward the Reserve Bank of Australia. The central bank was scheduled to announce its policy decision on Tuesday. Financial markets broadly anticipated that the RBA would leave interest rates unchanged, while investors were expected to closely examine its assessment of the economy and any signals about the future direction of monetary policy.

Mining stocks provided some support to the broader market. The mining sub-index climbed 1.4%, helped by stronger metal prices. Major mining companies BHP Group and Rio Tinto each gained more than 1%, while Fortescue rose 0.7%.

Gold-related shares performed even more strongly. The gold sub-index advanced more than 3%, reaching its highest level since mid-April as it tracked gains in bullion prices. Gold miners Evolution Mining and St Barbara rose 1.3% and 4.7%, respectively.

Elsewhere in the market, Treasury Wine Estates was a notable gainer. Its shares jumped nearly 8% after the company announced plans to reduce the size of its U.S. North Coast vintages from 2026 and said it would write down inventory, primarily bulk wine.

The Penfolds owner also provided an updated earnings outlook. Treasury Wine Estates forecast unaudited fiscal 2026 earnings before interest, tax, SGARA and material items, or EBITS, at A$492.3 million. That figure was above its previous guidance range of A$480 million to A$490 million.

The contrasting performances across sectors left the Australian benchmark under pressure despite strong gains in mining and gold-related stocks. Investors remained focused on corporate earnings developments as well as the upcoming RBA decision, which was expected to provide further insight into the central bank’s assessment of economic conditions.

Across the Tasman Sea, New Zealand stocks moved in the opposite direction. The benchmark S&P/NZX 50 index gained 0.5% to reach 13,892.88 points.

The Australian market’s decline highlighted the differing forces influencing equities ahead of the RBA announcement. Weakness in major lenders, particularly Westpac, weighed heavily on the benchmark, while stronger commodity prices supported mining and gold stocks. The combination left investors balancing concerns about housing and banking conditions against continued strength in parts of the resources sector.