The sharemarket edged higher on Tuesday as investors largely stayed on the sidelines amid uncertainty over when the US Federal Reserve will start to trim its bond-buying stimulus.
The benchmark S&P/ASX 200 Index added 6 points to 5393.1, while the broader All Ordinaries Index also gained 6 points, to 5386.6.
Two Fed members were scheduled to speak overnight on Tuesday, with brokers hoping for clues as to when the central bank will start to reduce its monthly stimulus.
"In the short term, the biggest risk for equity markets is how the world's largest economy will react to a reduced pace of monetary stimulus," Platypus Asset Management chief investment officer Don Williams said.
But he is confident global growth is improving and will withstand a gradual reduction in Fed asset purchases. "Liquidity is likely to remain elevated while other central banks - including the Bank of England, the European Central Bank and the Bank of Japan - maintain or even extend their monetary stimulus."
The local market had started with strong gains, but a surprising drop in business confidence weighed on sentiment. NAB's survey found confidence fell to a reading of 5 last month on the index, after a 3½-year high of 12 in September, while conditions remained weak. The big four banks all finished lower. "Banks have had a great run, now major resources stocks are likely to outperform in the coming six months," Mr Williams said.
BHP Billiton gained 0.3 per cent to $38.03, but rival Rio Tinto fell 0.6 per cent to $64.70. One analyst said Rio could be suffering as investors seeking exposure to the iron ore industry increasingly view Fortescue as a viable option.
Explosives and chemicals maker Orica led the market, adding another 8.2 per cent to $23.60, following its better than expected annual profit result the previous day. Rival Incitec Pivot jumped 7.3 per cent to $2.80 despite reporting a 14 per cent decline in annual net profit.
At the local close, the dollar was buying US93.36¢ down from US93.82¢ at the previous close.
Seven Group Holdings fell 1.6 per cent to $7.59 as it announced it will cut 630 staff from its WesTrac mining equipment business and issued another profit warning due to few new projects in the mining sector.
The Skilled Group jumped 6.7 per cent to $3.66, after announcing plans to buy competitor Thomas & Coffey for $33.5 million.