THE sharemarket closed higher as a positive day for energy stocks offset weakness among the retail banks and mining giant BHP Billiton.
The benchmark S&P/ASX 200 index closed up 16.5 points, or 0.39 per cent, at 4290.7, while the broader All Ordinaries index rose 18.8 points, or 0.43 per cent, to 4363.7. The March share price index futures contract was 1 point higher at 4248, with 21,270 contracts traded.
After opening firmer on the back of a positive lead from Wall Street, the market gradually slid back towards neutral during the day before rallying into the close.
Austock Securities strategist Michael Heffernan said positive momentum continued despite the Reserve Bank's surprise decision to leave official interest rates unchanged on Tuesday.
BHP Billiton reported first-half net profit of $US9.94 billion ($9.2 billion), down 5.5 per cent on the previous corresponding period and slightly below market consensus.
The miner said global economic volatility, industrial strife in Australia and South America and poor weather pushed down commodity prices and led to production constraints. The stock closed down 15? at $37.75. Mr Heffernan said the BHP report was "on the disappointing side of ordinary" and the stock had reacted accordingly.
"Nevertheless, there were enough positive moves around the place to nullify that," Mr Heffernan said.
Information technology was the best-performing sector, rising 1.76 per cent, according to Iress data.
Energy stocks gained 1.55 per cent, with Energy Resources of Australia (up 3.45 per cent, or 4.5? at $1.35) and Aurora Oil and Gas (up 2.74 per cent, or 8?, at $3) the top two gainers in the sector.
In other news, Alcoa said it was placing its Point Henry aluminium smelter under review, putting 600 jobs at the Geelong plant at risk. Shares in Alumina, which jointly owns Alcoa of Australia, closed down 1.5? at $1.285. Australia's big retail banks finished mostly lower. CBA slipped 19? to $50.32, NAB back-pedalled 28? to $22.93 and Westpac slipped 2? to $20.90. ANZ bucked the trend, climbing 25? to $21.61.
Macquarie Group, which on Tuesday said it expected full year net profit to fall 25 per cent, bounced back from its lows to close up 81?, or 3.1 per cent, to $26.71.
The spot gold price in Sydney was $US1745.10 an ounce, up $US22.38.
Gold miner Newcrest fell 16? to $33.38 while Kingsgate advanced 22? to $7.86.
Preliminary market turnover was 2.2 billion shares worth $5.1 billion, with 576 shares up, 392 down and 403 unchanged.