Australian shares finish lower as bank stocks drag

“The catalyst for the weakness amongst the big four was Westpac's (WBC) announcement, which pointed to subdued markets and rising funding costs,” said Chris Conway, Head of Research at Australian Stock Report.

According to Conway, the bank told the market that "institutional activity has remained subdued leading to lower markets-related income and a decline in fees from debt markets activities". 

Westpac shares fell 2.6% on the day, whilst Commonwealth Bank (CBA) lost 1.9%. ANZ Banking Group (ANZ) and National Australia Bank (NAB) lost around 1% each.

Weakness also befell the energy and materials sectors, on the back of lower commodity prices.

BHP Billiton (BHP) and Rio Tinto (RIO) lost 0.9% and 1.7% respectively, whilst Santos (STO) was the worst of the oilers, off 2.8%. 

Telcos and utilities also took a hit, the former due in large part to a negative reaction to Telstra's (TLS) latest results. The telco giant pledged to spend $4.5 billion - $1.5 billion on share buyback and $3 billion on plans to both repair and grow their network. However, the announcement did not give too many details on how the money would be spent exactly. 

Telstra shares shed 1.6% on the day. 

It wasn't all bad news though as consumer stocks rallied with discretionary plays the better performers on the back of a 2.1% gain in JB Hi-Fi (JBH). The gain on JB Hi-Fi shares came after the Australian Competition and Consumer Commission (ACCC) announced they would not oppose the acquisition of The Good Guys (by JB Hi-Fi).

IT stocks also rallied, with the 0.9% gain for Computershare (CPU) the standout. 

On the day the ASX 200 tumbled 36 points (-0.6%), settling at 5508.

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