Westpac Slide Pulls ASX 200 Down 0.3% at Finish

The ASX 200 slipped 31 points, or 0.3%, to close at 9,233 on Monday, marking a second consecutive weakness as declines in financials, consumer durables, and industrial services weighed. Sentiment stayed cautious ahead of the Reserve Bank of Australia's monetary policy decision. While markets expect cash rates to remain at 4.35% after three hikes this year, inflation risks linger amid geopolitical uncertainty. Financials were hit hard by a 5.4% drop in Westpac after the lender flagged halved investor housing credit growth next year and a 20% slide in mortgage applications, alongside softer quarterly cash earnings of AUD 1.8 billion. Peers ANZ, Commonwealth Bank, and NAB also shed about 2%. Still, miners provided some offset, supported by firm metal prices, with BHP up 1.2% and Rio Tinto adding 0.6%. In the meantime, Treasury Wine Estates surged 4.8% after announcing plans to shrink its U.S. North Coast vintages from 2026 and write down bulk wine inventory.

Australian shares fell 45 points, or 0.5%, to 9,218 in early trading on Monday, extending losses for a second session as U.S. stock futures weakened amid growing doubts that the U.S. and Iran will soon reach a deal to reopen the Strait of Hormuz. Caution also lingered ahead of the Reserve Bank’s policy decision later this week, as sticky costs cloud the outlook despite three hikes so far this year. New data from main trading partner China added to the unease, with July inflation easing to a six-month low and producer prices rising the least in three months, underscoring soft demand. Financials led declines: the big four banks fell between 1.4% and 4.6% after Westpac’s soft Q3 earnings update. Insurers followed lower, with QBE (-2.3%), Insurance Australia (-2.5%) and AUB Group (-1.7%) among the laggards. Losses also spread to consumer durables, commercial services and logistics. Offsetting the weakness, BHP (1.1%), Northern Star Resources (1.8%) and Evolution (1.5%) posted solid gains.

The ASX 200 eased 0.1% to close at 9,264 on Friday, snapping a five-session run of gains as traders booked profits after the index hit fresh highs twice this week. Weaker U.S. stock futures also weighed on sentiment amid geopolitical headwinds following reports that Iran may move to restrict “hostile” vessels in the Strait of Hormuz. Commercial services, healthcare, tech, and financials slipped, offset by resilience in non-energy minerals and manufacturing. The big four banks fell between 1.0% and 1.6%, while other notable laggards included Fortescue (-2.3%) and Qantas (-1.1%). Still, markets posted a second successive weekly gain, up 3.2%, boosted by steady buying and a rebound in Australia's June exports. In top trading partner China, exports and imports continued to rise at double-digit rates in July, though both eased from June’s pace. Traders now await next week’s Reserve Bank interest rate decision as slowing activity and sticky costs persist despite three hikes this year.