The benchmark S&P/ASX200 closed 3.7 points, or 0.07 per cent, higher at 5011.2, while the broader All Ordinaries added 5.5 points, or 0.11 per cent, to 5087.8.

On the Sydney Futures Exchange, the September share price index contract closed one point lower at 4985 on a volume of 24,511 contracts.

CMC Markets senior dealer analyst Dominic Vaughan said Macquarie Group led the financials down after a broking house downgraded the investment bank to ''neutral'' from ''buy''.

The banks were poorer. ANZ was down 4c to $16.08, Commonwealth Bank fell 72c, or 1.7 per cent, to $41.63, National Australia Bank fell 4c to $23.86 and Westpac fell 5c to $22.70.

The major miners made slight gains. BHP Billiton improved 14c, or 0.34 per cent, to close at $40.89, while takeover target Rio Tinto added 94c, or 0.76 per cent, to close at $125.

Energy companies benefited from higher oil prices overnight.

Oil Search added 19c to end at $5.83 and Santos gained 59c to $19.40.

The spot price of gold in Sydney closed at $US825.45 an ounce, up $US6.00 on Tuesday's local close of $US819.45 an ounce.

Gold miners mostly were stronger, with Lihir adding 7c to end at $2.32, Newmont up 6c at $5.10 and Newcrest steady at $26.25.

The retailers were mostly stronger, with Woolworths up 71c at $27.41, David Jones adding 6c to $4.29 and Coles owner Wesfarmers gaining 65c to $31.65.

Telstra was the most traded stock, 35.8 million shares changing hands, worth $153.6 million.

The telco ended 5c higher at $4.30. AAP