Australian shares slip as Westpac drags banks, miners rally

Australian equities opened the week on a softer note, with the S&P/ASX 200 index slipping 0.5% to 9,220.30 points in early trade. The decline was driven by a sharp sell-off in banking stocks, led by Westpac, which offset gains in the mining sector.

Westpac shares tumbled more than 5%, marking their steepest intraday fall since late March. The lender's quarterly update revealed a 20% drop in mortgage applications and forecast that investor housing credit growth would halve in the coming year. Cash earnings for the June quarter came in at A$1.8 billion, down from A$1.9 billion a year earlier.

The weakness in Westpac dragged the broader financials sub-index down 1.9%, its largest intraday loss in three months. Commonwealth Bank of Australia, ANZ, and National Australia Bank all fell, with losses ranging between 1.3% and 2.4%.

Investor attention is now turning to the Reserve Bank of Australia's policy decision, due on Tuesday. Markets widely expect the central bank to hold interest rates steady, with the focus on any signals regarding the future path of monetary policy.

Offsetting the losses in banking, mining stocks rose 1.4% on the back of firm metal prices. BHP Group and Rio Tinto each gained more than 1%, while Fortescue added 0.7%. The gold sub-index also performed strongly, climbing over 3% to its highest level since mid-April, tracking a rise in bullion prices. Evolution Mining and St Barbara advanced 1.3% and 4.7%, respectively.

In corporate news, Treasury Wine Estates jumped nearly 8% after the Penfolds maker announced plans to reduce its U.S. North Coast vintages from 2026 and write down inventory, mainly bulk wine. The company also forecast its FY26 unaudited EBITS at A$492.3 million, above its prior guidance range of A$480 million to A$490 million.

Across the Tasman, New Zealand's S&P/NZX 50 index rose 0.5% to 13,892.88 points.