The All Ordinaries index lost 20 points to 5,758 while the ASX 200 dropped 0.6 of a per cent to 5,668.

Stronger commodity prices have buoyed the miners with BHP Billiton gaining 2 per cent to $45.29.

Fortescue Metals shares climbed nearly 9 per cent to $9.39 after it loaded its first iron ore.

But confidence in the banks has been hurt by St George's disappointing profit result earlier this week and as a result the financial sector slumped.

The Commonwealth Bank and Westpac both lost more than 3 per cent.

A private sector Performance of Construction Index fell in April to its lowest level since it began two-and-a-half years ago.

The survey is by the Australian Industry Group and the Housing Industry Association, and measures activity in the residential, commercial and engineering construction industries.

It is another addition to the pile of evidence showing higher interest rates putting the brakes on the construction sector.

Building stocks dropped with Boral down 3.1 per cent to $5.95.

In other market news, Australia's biggest shopping centre manager, Westfield, says rental sales in its US business are slowing.

Its shares have fallen 1.6 per cent to $17.73.

The Australian dollar has been sitting close to a two-week high and Westpac is predicting that next March, it will reach 101 US cents.

About 5.00pm AEST, the dollar was buying 94.63 US cents, 48.22 UK pence, 99.32 Japanese Yen, and 61.11 euro cents.

Oil has climbed to a record high overnight and West Texas crude oil is fetching $US121.82 a barrel while spot gold was worth $US874.05 an ounce.

Source: ABC Australia Copyright