Investors hope for continued US stimulus
At the close on Wednesday the benchmark S&P/ASX 200 Index was up 15.4 points, or 0.28 per cent, at 5430.9, while the broader All Ordinaries was up 14.7 points, or 0.27 per cent, at 5425.4.
The Federal Open Market Committee members meeting early on Thursday morning, Australian time, was expected to keep America's quantitative easing in place after the release of mediocre economic data.
"There is a bit of trepidation leading into such a major economic event, which is why our market couldn't sustain its early morning gains," Australian Stock Report senior equity analyst Benny Sada said.
A US dollar rally, leading up to the committee meeting, also hit commodity prices, including gold.
Australia's biggest listed gold producer, Newcrest Mining, shed 23¢, or 2.1 per cent, to $10.67.
The resource giants made small gains, with BHP Billiton climbing 8¢ to $37.67 as Rio Tinto added 3¢ to $63.44.
In the financial sector, National Australia Bank slipped while its three major rivals were up, suggesting investors doubt NAB's financial results on Thursday will impress.
"NAB's going to really have to shoot the lights out with their results because their share price move over the past few weeks has factored in a good result," Mr Sada said.
NAB shares dropped 45¢ to $36.23, while ANZ gained 7¢ to $33.70, Commonwealth Bank added 22¢ to $77.01 and Westpac was 30¢ higher at $34.90.
Among the day's top performers was JB Hi-Fi, which said sales in the early months of the financial year were higher. Its shares gained 75¢, or 3.65 per cent, to $21.29.
Insurance Australia Group also performed well, after maintaining its financial guidance, gaining 17¢, or 2.86 per cent, to $6.11.
The gold price was $US1345.13 an ounce, down $US8.72.
Bond futures prices were higher after some investors saw comments from the Reserve Bank's Glenn Stevens as increasing the chances of another cash rate cut.
He told a function on Tuesday that the Australian dollar would eventually fall from its historically high levels.
The bond market has rallied since the comments, which stoked hopes of a further cut, Westpac interest rate strategist Tim Jung said.
"The market has interpreted that as meaning the chances of further easing have been elevated since the speech," he said.
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The sharemarket edged higher as investors expected the US Federal Reserve to maintain its economic stimulus measures, which boosted market confidence.
The US dollar rally leading up to the Federal Open Market Committee meeting negatively impacted commodity prices, including gold.
Newcrest Mining, Australia's biggest listed gold producer, saw its shares drop by 23 cents, or 2.1 percent, to $10.67 due to the impact of the US dollar rally on gold prices.
BHP Billiton and Rio Tinto made small gains, with BHP climbing 8 cents to $37.67 and Rio Tinto adding 3 cents to $63.44.
National Australia Bank's shares dropped by 45 cents to $36.23 as investors were skeptical about the bank's upcoming financial results meeting expectations.
JB Hi-Fi and Insurance Australia Group were among the top performers, with JB Hi-Fi's shares gaining 75 cents, or 3.65 percent, to $21.29, and Insurance Australia Group gaining 17 cents, or 2.86 percent, to $6.11.
Glenn Stevens mentioned that the Australian dollar would eventually fall from its historically high levels, which increased the chances of another cash rate cut.
The bond market rallied following Glenn Stevens' comments, as they were interpreted as increasing the likelihood of further easing, boosting hopes for a cash rate cut.
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