Australian dollar closed at 72.19 US cents and in stock trading turnover slid to 743 billion shares worth $4.6 billion.
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The benchmark S&P/ASX200 index was down 46.8 points, or 0.89 per cent, at 5,232.9 points.
Moderately better Chinese lending data improved sentiment last night, but after a brief drop, investors shrugged off the warning from New York Federal Reserve president William Dudley that a rate rise was still on the cards if the United States economy remained on track.
Australian Leisure and Entertainment Property Management Ltd fell 0.8% to $3.61 after the property developer received an unsolicited non-binding proposal from Caledonia (Private) Investments Pty Limited for about $3.95 per share valued at $773 million or US$560 million.
The Australian dollar edged off multi-week highs on Tuesday after a nine-session winning streak drew sellers and a return of risk aversion hit commodities such as copper and gold.
New Zealand government bonds rose, sending yields two basis points lower along the curve.
The bank said the increase was to cover the cost of new regulations that require banks to increase their capital reserves.
Telstra was up 3.5 cents, or 3.5 per cent, at $5.475.
The major European markets also showed strong moves back to the upside on Thursday.
“The market is still perhaps grappling with what the, if any, macro impacts may be from the Westpac decision, but in terms of the micro, I think what it has done is seen a rally in the banking sector, which has been helpful for the overall index”, CMC Markets chief market analyst Ric Spooner said.
Australia’s big four banks have raised a combined AU$17B in fresh equity since May this year, to boost capital reserves.
“And that’s possibly why we are seeing the banks and the telcos doing so well this morning”.
The index was up 0.4 percent, or 22.67 points, at 5,749.80 in afternoon trade, having gained more than 2 percent in a week.
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The December share price index futures contract was up 65 points at 5,272 points, with 13,813 contracts traded.
