Volumes lower as Cup proves a distraction

The sharemarket closed higher on Tuesday, propelled by overnight gains in global equities and stronger bulk commodity prices, but volumes were well below average, with investors distracted by the Melbourne Cup.

The benchmark S&P/ASX 200 Index added 41.4 points, or 0.8 per cent, to 5432.0 as the big four banks, along with the biggest mining and energy stocks, led the bourse higher. The broader All Ordinaries index also gained 41.4 points, or 0.8 per cent, to 5425.7.

The market opened higher, taking its lead from international equities after Wall Street and major European markets closed higher. It continued to climb in the afternoon, despite declines on markets in Asia.

While investors shrugged off the RBA's decision to keep the cash rate at a historic low, as expected, the dollar fell about a quarter of a cent to US94.7¢, after the RBA's statement pointed out the currency was still "uncomfortably high".

Among the banks, CBA jumped 1.2 per cent to a record $77. National Australia Bank rose 1 per cent to $35.80, while ANZ gained 0.8 per cent to $33.79 and Westpac added 0.6 per cent to $34.35.

Listed funds manger Magellan Financial fell ahead of the release of its monthly funds under management update but recovered somewhat after showing net inflows of more than $1.5 billion during October. The stock closed down 2.2 per cent at $11.

Resource stocks were the best performers, with the energy index up 1.3 per cent, and the metals and mining index gaining 1.4 per cent.

Iron ore exporters benefited as the spot price rose 0.4 per cent to $US135.80 a tonne.

BHP Billiton added 0.9 per cent to $37.85, while Rio Tinto rose 1.5 per cent to $64.70 and Fortescue jumped 4 per cent to $5.53. Junior iron ore miner Sundance Resources was the best-performing stock, soaring 15 per cent to 11.5¢.

Woodside Petroleum added 1.4 per cent to $39.35, after the Brent crude oil price edged up 0.1 per cent to $US106.28 ($112) per barrel. Santos rose 0.5 per cent at $15.17, while Oil Search gained 0.9 per cent at $8.56. Origin Energy lifted 2 per cent to $14.67.

Linc Energy dropped 0.4 per cent to $1.36, after announcing it would close its underground coal gasification plant in Queensland due to regulatory obstacles and plans to move the operation to an unspecified Asian location.