Westpac Falls 2.6% as Mortgage Applications Drop 10%, June 14

Westpac Banking Corporation fell 2.6% to A$35.00 on Thursday after reporting a 10% drop in mortgage applications. The decline dragged the broader financial sector lower as the S&P/ASX 200 slipped 0.23%. Short interest in Australia’s big four banks has climbed to nearly A$11 billion, the largest since 2010. The mortgage slowdown signals weakening housing demand amid economic uncertainty.

Mortgage Applications Plunge, Dragging Sector Down

Westpac reported a 10% drop in mortgage applications, triggering a 2.6% fall in the stock. The decline reflects softening demand in Australia’s housing market as consumers face economic headwinds. Financials as a sector lost 1.45% on Thursday, with Westpac’s weakness contributing to the broader pullback.

Short Sellers Target Australian Banks

Hedge funds now hold nearly A$11 billion in short positions across Australia’s top four banks, the largest short bet since 2010. This pressure weighs on all major lenders, including WBC.AX. The surge in short interest reflects investor concerns about credit quality and profitability in a slowing economy.

Meyka’s Rating Points to Value Opportunity

Meyka rates Westpac a B+ with a 12-month price target of A$46.03, implying 31% upside from the current A$35.00 price. The stock trades at a PE ratio of 17.24 with a 4.4% dividend yield. Technical indicators show the RSI at 34.56, suggesting oversold conditions, though the ADX trend strength remains elevated at 42.77.

Broader Banking Sector Under Pressure

Australia’s banking sector faces multiple headwinds. ANZ and NAB also declined as sellers targeted major lenders. The RBA cash rate remains at 4.35%, and softer economic data lowered expectations for a rate hike at the June 16 meeting. Westpac’s mortgage application decline signals that higher rates are dampening housing demand across the market.

Final Thoughts

Westpac’s 2.6% drop reflects real weakness in mortgage demand, but Meyka’s B+ rating and A$46.03 target suggest the market may be overshooting. With a 4.4% dividend yield and oversold technical signals, the risk-reward favors patient investors.

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The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.