(Updates to midday)
WELLINGTON, Oct 19 (Reuters) - Australian stocks were flat on Monday with mining shares on the defensive ahead of a set of Chinese economic data, offsetting a massive rally in Westpac Banking Corp.
The S&P/ASX 200 index .AXJO eased 0.07 percent, or 3.8 points, to 5,264.4 by 0110 GMT. Weighing on the overall market, BHP Billiton (L:BLT) BHP.AX dipped 1.2 percent, while fellow global miner Rio Tinto (L:RIO) RIO.AX shed 0.7 percent.
Data due later in the day is expected to show China's third quarter economic growth slowed to below 7 percent for the first time since the global financial crisis.
In contrast, shares in Westpac WBC.AX climbed as much as 4.5 percent to a two-month high after a trading halt was lifted. Last week, the lender said it would raise A$3.5 billion to meet strict capital rules and surprised the market by lifting its home loan rates to protect its profits.
The unexpected move has fuelled speculation that other lenders will follow suit. Investors are looking to see if Commonwealth Bank of Australia CBA.AX will be next to raise its mortgage rates.
National Australia Bank NAB.AX and Australia and New Zealand Banking Corp. ANZ.AX could wait until they reported their full-year earnings next week.
If all the banks lifted their home loan rates, that would be tantamount to a tightening of financial conditions - an unwelcome development for a fragile economy. As a result, speculation of a cut in official interest rates has also grown.
"If CBA does raise rates, the interbank market's rate cut expectations will rapidly ascend towards 100 percent probability," said Evan Lucas, market strategist at IG.
Across the Tasman Sea, New Zealand stocks struggled to maintain the momentum that has swept the benchmark S&P/NZX 50 index to a two-month high.
It was last a tad softer at 5,819.3, having peaked at 5,867.9 - a high last seen on Aug. 11. The index has rallied over 4 percent this month alone.
Diversified retailer Warehouse Group Ltd slid 1.5 percent, giving back a chunk of Friday's 2.3 percent jump. Contact Energy eased 1.0 percent, pulling away from a one-month peak set on Friday.