The local market ended down close to 0.5 per cent today, as major banks stocks weighed heavily as they traded without dividend.
The All Ordinaries lost 20 points to 4,483, and the ASX 200 retreated 22 points to 4,462.
Westpac lost 3 per cent while NAB lost just over 4 per cent as they traded without dividend.
NAB ended off session lows though after agreeing to settle a .
More than 15,000 shareholders lost money in mid-2008 when NAB's share price plunged due to investments tied up with subprime mortgages in the US.
The shareholders allege the bank failed to notify them of projected losses from investments.
NAB says the payout will not affect its bottom line.
The major mining stocks also came under selling pressure, losing around 1 per cent.
Rio Tinto released an economic outlook focusing on China, which it says is seeing short-term slowdown in growth, before the economy will pick up and double by 2020.
In its quarterly outlook, the RBA cut its growth forecast from 3 per cent to 2.75 per cent for the next year, reiterating that mining investment will peak earlier and at lower levels than it originally thought as projects are delayed or cut.
The RBA is banking on other sectors of the economy, particularly construction to start picking up where mining is leaving off, but the Federal Government's pursuit of a surplus is also set to weigh on growth.
The Australian dollar picked up in late afternoon trade and was worth 104.22 US cents at 4pm (AEDT).
It was also buying 81.6 euro cents, 65.2 British pence and 82.8 Japanese yen.
West Texas crude was flat at $US85 a barrel, Tapis was slightly higher at $US112 a barrel, while spot gold trimmed back some of yesterday's gain to $US1,737 an ounce.