Westpac Slump Drags Down Australian Shares Ahead of RBA Decision

The S&P/ASX 200 index dropped 0.5% to 9,220.30 points on Monday, primarily pressured by a decline in the financials sector. Westpac Banking Corporation saw its shares slide more than 5% after a quarterly update for the period ending June 30 reported cash earnings of A$1.8 billion and a 20% decrease in mortgage applications. This downturn impacted other major lenders, including the Commonwealth Bank of Australia, ANZ, and National Australia Bank.

These losses countered gains in the mining sector, where BHP Group, Rio Tinto, and Fortescue rose on the back of strong metal prices. In other movements, Treasury Wine Estates experienced a nearly 8% share increase following a positive FY26 earnings forecast and plans to reduce U.S. North Coast vintage sizes starting in 2026.

Market participants are now focused on the Reserve Bank of Australia, which is scheduled to announce its monetary policy and interest rate decision on Tuesday. Current market expectations suggest that interest rates will remain unchanged.