The sharemarket edged higher as investors reacted to positive news from China and uncertainty in the US.
At the close on Wednesday, the benchmark S&P/ASX 200 Index was up 4.8 points at 5052, while the broader All Ordinaries increased 9.4 points to 5035.
The market dropped off in afternoon trade, which Stock Report analyst Benny Sada said reflected uncertainty about a key US Federal Reserve meeting.
The Federal Open Markets Committee is expected to make an announcement on Thursday, Australian time, about the tapering of its stimulus measures.
"There's just that uncertainty," Mr Sada said. "A lot of market participants are looking towards that meeting for clues on how the US central bank intends to scale back its monetary easing policy."
He believed the local market rallied during the day after positive comments from the Chinese government on economic growth.
"A bit of good and a bit of bad today," Mr Sada said. "We had some good news out of China, countered by uncertainty ahead of the US central bank meeting."
High-yield retail and banking stocks were the strongest performers. The big four banks were all higher, with ANZ up 30¢ at $29.89, Commonwealth Bank up 47¢ at $74.50, NAB rising 17¢ to $31.36 and Westpac 22¢ higher at $31.08. In the retail sector, Wesfarmers was up 34¢ at $40.56.
The big miners were down, with BHP Billiton 31¢ lower at $34.64 and Rio Tinto 20¢ down at $57.51.
"The weight of the market, including a pretty bearish night in commodity markets overnight, had an impact on our miners," Mr Sada said.
The dollar was lower following a dovish speech by Reserve Bank governor Glenn Stevens on Wednesday that hinted at another rate cut next week.
It followed weaker-than-expected building approval figures for June that also put pressure on the local currency.
Late on Wednesday, the dollar was trading at US90.16¢, down from US90.63¢.
Forex.com research analyst Chris Tedder said Tuesday's drivers were still weighing on the Aussie.
"Everyone has just started jumping on the bandwagon after that weak building approvals data but especially that dovish rhetoric we saw from RBA governor Glenn Stevens," Mr Tedder said.