A late afternoon rally by the big four banks has lifted the share market out of the red.
The market was lower in morning trade after Wall Street fell overnight on disappointing business spending figures and nervousness ahead of a US Federal Reserve meeting.
But sentiment improved in afternoon trade thanks to the banks, Australian Stock Report head of research Chris Conway said.
“With all of these quantitative easing programs going across the globe, people are looking for quality names and quality yields that are relatively safe,” he said.
“That’s why the banks have been rallying recently.”
Low inflation figures for the December quarter would encourage people to play the share market rather than keep money in the bank, Mr Conway said.
The figures have reduced expectations of an interest rate cut by the RBA next week.
The banks all closed higher despite early falls, with Commonwealth Bank up seven cents at $87.70, Westpac up 12 cents at $34.68, National Australia Bank up five cents at $35.20 and ANZ seven cents higher at $32.64.
In the resources sector, BHP Billiton dropped one cent to $28.94, Rio Tinto added 18 cents to $56.98 and Fortescue Metals shed four cents to 2.04.
OZ Minerals added 17 cents to $3.61 after beating full year production guidance.
Bradken shares slumped $1.47, or 35.8 per cent, to $2.64 after a private equity consortium withdrew its takeover offer for the engineering group.
Rail operator Aurizon climbed eight cents to $4.88 after reaffirming full year rail volumes guidance.
Telstra lifted five cents to $6.49, while Woolworths shed 92 cents to $31.54 and Coles owner Wesfarmers dropped 24 cents to $43.45.
KEY FACTS
* At the close on Wednesday, the benchmark S&P/ASX200 index was up 5.6 points, or 0.1 per cent, at 5,552.8 points.
* The broader All Ordinaries index was up 5.1 points, or 0.09 per cent, at 5,516.6 points.
* The March share price index futures contract was up 21 points at 5,512 points, with 24,881 contracts traded.
* The price of gold in Sydney at 1700 AEDT was $US1,291.50 per fine ounce, up $US12.70 from $US1,278.80 on Tuesday.
* National turnover was 1.6 billion securities worth $5.1 billion.
