Australian shares dragged lower by banks Heavy losses across all of the big four banks as Westpac Corporation traded ex-dividend pulled the Australian equity market lower. The biggest lenders all fell despite official data showing investment property lending surged in September. The benchmark S&P/ASX 200 Index and dropped 0.5 per cent, on Monday to 5524 points, while the broader All Ordinaries Index shed 0.4 per cent to 5501.4 points. Local shares took a mixed lead from offshore. In the United States on Friday night the S&P 500 and Dow Jones Industrial Average edged higher will the Nasdaq edged lower. In Europe the FTSE 100 was higher while the FTSE Euro Top 100 was lower. Asian markets provided mixed cues on Monday afternoon. Japan's Nikkei was weaker, while Korea's Kopsi jumped more than 1 per cent after a government official said the nation had reached a trade agreement with China. The Shanghai Composite Index and Hong Kong's Hang Seng also lifted more than 1 per cent. "Many local retail investors will be keeping money aside this week ahead of the government's upcoming $5.5 billion float of Medibank Private," Morgans private client advisor Ken Howard said. In economic news, a report from the Australian Bureau of Statistics showed a 3.7 per cent surge in new lending for investment properties September. Overall, the number of new home loans approved in September fell 0.7 per cent, against expectations for a smaller 0.4 per cent fall. The spike in speculative property buying adds weight to calls for the Reserve Bank of Australia to turn to macro-prudential tools, that would likely require the biggest mortgage providers to meet stricter lending criteria. The big four banks were all lower on Monday. Westpac Banking Corporation lost 3.9 per cent to $33.47 as it traded without the rights to 92¢ per share final dividend. ANZ Banking Group shed 1.1 per cent to $32.52, while National Australia Bank lost 0.7 per cent to $32.98, with both having traded ex-dividend at the end of last week. Commonwealth Bank of Australia fell 0.2 per cent to $82.56, "Westpac had the strongest result of all the big four this bank reporting season, but NAB has the most room for improvement from here," Mr Howard said. Among other blue-chip stocks, Telstra Corporation fell 0.7 per cent at $5.73. Woolworths slipped 0.2 per cent to $34.43, while Wesfarmers, owner of Coles, lost 0.3 per cent to $44.67. In China, National Bureau of Statistics data showed inflation grew at a rate of 1.6 per cent in October, unchanged from September and hovering near a five-year low. China's producer price index fell 2.2 per cent from a year ago. It was the 32nd consecutive month of declines. The relaxation of mortgage rules by the Peoples' Bank of China last month will likely mitigate part of the downward corrections in the real estate market, but it will take some time. China's economy suffers severe insufficient demand, especially on the industrial front. Risks of deflation persist, and growth still faces significant downward pressure," HSBC China economist Jing Li said. Despite the latest confirmation of slowing growth in China, mining and energy were the best-performing sectors as commodity prices got a bounce. The spot price for iron ore, landed in China's Qingdao port, was up 0.6 per cent at $US75.84 a tonne, while Brent crude oil added 0.3 per cent to $US83.62 a barrel. Resources giant BHP Billiton rose 0.6 per cent to $34.68, while main rival Rio Tinto lifted 0.9 per cent to $61.24. Australia's biggest oil producer Woodside Petroleum added 0.5 per cent to $40.91. "With iron ore and oil prices trading at multi-year lows in commodity markets, many of the smaller producers will continue to struggle," Mr Howard said. China-backed coal miner Yancoal Australia plunged 27.3 per cent to 16¢ as it announced a $US2.3 billion debt raising to repay mounting loans to its major shareholder. Uranium miners got a boost from news Japan is set to restart its Sendai nuclear plant, which has been closed since the Fukushima disaster in 2011. Paladin Energy jumped 12.1 per cent to 37¢. Australia's biggest gold producer, Newcrest Mining, rose 5.5 per cent to $9.27 as Citigroup­ analysts upgraded it to a "buy" following a last week's stronger than expected quarterly production update. Childcare provider G8 Education was the worst-performer in the ASX 200, down 4.6 per cent to $4.60. It was the seventh consecutive session of losses for the stock.