The Australian stockmarket fell to its lowest in three weeks on Thursday after weak building data encouraged steep end of month profit-taking, particularly in bank shares.

At the 1615 AEST official market close, the benchmark S&P/ASX200 index was down 62.1 points for the day, or 1.3 per cent, to 4582.9, while the broader All Ordinaries index fell 57.1 points, or 1.2 per cent, to 4636.9.

Tim Shroeders, portfolio manager at Pengana Capital, said there was "a little bit of profit taking for the end of the quarter."

"People who are playing in the equity market are still very cautious in doing so ... against an uncertain macroeconomic back drop. It's by no means disastrous but you have to be ever vigilant in such an environment and it doesn't surprise me that there's not much follow-through today," he said.

The major banks led the retreat, despite the central bank giving a clean bills of health to banks and households, suggesting financial conditions were no barrier to raising interest rates.

National Australia Bank lost 56 cents to $25.34 after UBS downgraded the stock to neutral from buy, and cut its price target to $27.50 from $32.50.

ANZ Banking Group dumped 1.9 per cent to $23.68, while Commonwealth Bank of Australia slid 1.69 per cent to $51.17.

Westpac Banking Corp slumped 47 cents to $23.24.

Meanwhile, Investment bank Macquarie Group dropped 1.97 per cent to $36.27.

Resources stocks gave up early gains, on reports major miners BHP Billiton and Rio Tinto may revise or postpone a proposed $120 billion iron ore joint venture.

BHP Billiton shed 46 cents at $38.91, and Rio Tinto sagged 49 cents at $76.77. Fortescue Metals Group bucked the trend, lifting 1.16 per cent to $5.21.

Gold producer Newcrest Mining weakened 0.82 per cent to $39.67, despite the price of gold setting its 10th record in 12 days overnight.

With Reuters