THE stock market closed higher on the back of gains in the banking and resource sectors as bargain hunters took advantage of recent falls on the bourse.
At the close, the benchmark S&P/ASX200 index was 32.4 points, or 0.89 per cent, higher at 3687, while the broader All Ordinaries picked up 30.4 points, or 0.85 per cent, to 3624.3.
"The banking sector has been strong and the big resources, both BHP and Rio, have picked up over the day,'' MF Global senior trader Anthony Anderson said.
"I think people are keen to buy on a little bit of weakness at the moment.''
Big miners were stronger.
BHP Billiton added 51 cents to $30.94 while rival Rio Tinto put on 26 cents to $40.61.
Rio Tinto plans to cut production and reduce the workforce at its Argyle diamond mine in Western Australia to conserve cashflow and reduce debt amid the global economic downturn.
Energy stocks were mixed.
Woodside gained 88 cents to $35.65, Santos added 31 cents to $14.09 and Oil Search lost five cents to $4.37.
Oil refiner Caltex Australia put on 42 cents to $7.90 after the company said its 2008 operating profit would be higher than previous guidance, but still lower than the prior year.
The banking sector was strong at the close.
ANZ picked up 48 cents to $15.33, NAB gained 32 cents to $20.67, Commonwealth Bank added 3 cents to $28.42 and Westpac putting on 20 cents to $16.75.
Retail stocks were mixed.
Woolworths put on 56 cents to $26.92, Harvey Norman adding 12 cents to $2.53, Wesfarmers lost 50 cents to $16.99 and David Jones shed six cents to $2.92.
Wesfarmers, the owner of coles, has warned it may need to cut dividend payments after flagging a hit to the balance sheet from provisions and asset write-downs.
In media stocks, Consolidated Media Holdings lifted 2.5 cents to $1.98, News Corporation (the parent company of the publisher of news.com.au) putting on 48 cents to $13.98 and Fairfax picked up 9 cents to $1.65.
Gold shares were confused.
Newmont rose 14 cents to $5.39, Newcrest lost $1.48 to $30 and Lihir gave up 2 cents to $2.66.
The spot price of gold at 4.19pm was trading at $US825.40 an ounce, up $US2.75 on Tuesday's local close of $US822.65 an ounce.
At 4.15pm (AEDT) on the Sydney Futures Exchange, the March share price index contract was 38 points higher at 3661, on a volume of 17,613 contracts.
