Stocks settle just below 5,000

Financials provided key support in a third straight lacklustre session that saw the Australian stock market again flirt with the 5000 level before inching to a near flat close, despite overseas markets cheering Ben Bernanke's comment that tapering of stimulus measures was flexible.

At the 1615 AEST official market close, the benchmark S&P/ASX200 index rose 0.23% to 4993.4 points and the broader All Ordinaries index added 0.21% to 4,976.9 points.

In testimony to Congress, Dr Bernanke reiterated that the Fed would likely scale back its $US85 billion-a-month bond-buying program later this year, but only if the economy improved.

CMC Markets sales trader Betty Lam said after an anticlimactic lead from Wall Street, "the “act-first-think-later” trading patterns have eased off for the time being".

IG market analyst Chris Weston said there was little conviction from either the bulls or bears.

"The recent high of 5012.5 was tested again with good supply coming into the market at 5008, and clearly the momentum players would like a closing break of 5012.5 for a quick move to 5101," he said.

Financial stocks was mixed, with the big four banks posting gains.

Commonwealth Bank gained 0.74% to $71.74, while ANZ Banking Group rose 0.52% to $28.95.

National Australia Bank increased 1.03% to $30.34, while Westpac Banking Corporation put on 0.95% to $29.68.

Investment bank Macquarie Group lost 0.52% to $44.10.

In the insurance sector, QBE retreated 1.15% to $16.31, Insurance Australia Group climbed 1.52% to $5.85 and Suncorp inched down 0.16% to $12.65.