Resource gains paint a positive picture

Steel stocks were among the best performers but the major banks lost ground.

The benchmark S&P/ASX 200 Index finished the session up 6.9 points, or 0.15 per cent, at 4605.

NAB chief economist - markets Rob Henderson said the market produced a "mixed picture" yesterday. Financials shed 0.06 per cent while materials rose 0.70 per cent.

Mr Henderson said increases in commodities prices had boosted resources equities, but the financial sector lost ground because interest rates were left unchanged for at least another month.

"I think it might be a delayed reaction to the Reserve Bank decision to leave rates on hold," he said. "The market seems to believe that the banks make more money when interest rates are up."

CommSec market analyst Juliette Saly said economic problems in Portugal contributed to concerns in the Australian market.

Ratings agency Moody's downgraded Portugal's government debt on Tuesday, citing growing risks the country will require a second rescue package because it cannot meet its debt reduction targets.

Moody's cut Portugal's rating from to Baa2 from Baa1. It said the country would probably require more financial aid on top of the ?78 billion ($A105 billion) bailout it received earlier this year with private banks taking some losses.

The agency's report is a blow to Portugal as it tries to distance itself from Greece, which has implemented painful austerity measures because it did not meet debt reduction targets.

Moody's said Portugal faced huge challenges in reducing spending and tax evasion, achieving economic growth and supporting the banking system.

Mr Henderson said investors would be watching what impact US jobs data, due out tomorrow, would have on the Australian market. Weak employment figures in the US non-farm payroll data could have a negative effect.

Ms Saly said small volumes of shares were traded yesterday. People nervous about getting into the market might hold back until the US data was released, she said.

National Australia Bank lost 18? to $24.96, Commonwealth Bank shed 31? to $51.47, Westpac dropped 8? to $21.89 and ANZ slipped 8? to $21.85.

BlueScope Steel was 8? higher at $1.385 while OneSteel gained 12?, or 6.22 per cent, to $2.05 yesterday.

BHP Billiton gained 22? to $44.45 and Rio Tinto rose 28? to $83.60.