Australian shares finish down after banks, Telstra turn tide Equities Stephen Cauchi Australian shares finished in the red after a choppy day's trading, with a sell-off in banks and Telstra dragging the market down despite bargain hunters briefly pushing the market into positive territory. 
Overseas leads were poor, with the Dow Jones falling 0.9 per cent, Brent crude oil dropping below $US40 for the first time since early 2009, and iron ore staying below $US40, reaching a fresh record low of $US38.80.
In commodity news from overseas, global mining house Anglo American announced it would shelve its dividend, seek to sell a majority of its assets and cut its workforce by 85,000 as part of a radical overhaul aimed at surviving the prolonged downturn in commodity prices.
The news followed Rio Tinto's announcement it would cut capital investment for the second time in four months, slashing another $US1.5 billion over two years.
The benchmark ASX200 index finished 0.5 per cent lower at 5080.5 while the broader All Ordinaries was 0.5 per cent lower at 5129.9.
Morgans private client adviser Alistair McCorquodale said news that the major miners were starting to cut back production was starting to be felt.
"The big news overnight was the action taken by the board of Anglo- American, where they've taken really strong action to preserve the company by, essentially, closing loss-making mines.
"We also saw Rio Tinto's board come out and further restrict their capex. That gives investors confidence that companies are going to take definitive action to try and improve the demand and supply imbalance we're seeing in the commodities market."
Weaker housing finance numbers also had an impact on the market, briefly spiking it into positive territory around noon.
There was a sharp decline in investor lending, with loans approved for investment housing down 6.1 per cent in   October, based on their value, while approvals for owner-occupied housing rose 0.4per cent.
Rio fell 0.8 per cent to $42.05.
Fellow blue-chip Telstra shed 0.9 per cent to $5.31.