THE Australian sharemarket strength continued yesterday as most sectors of the market reacted positively to Friday's gains on Wall Street. But it was a quiet trading day due to long-weekend holidays in the US and Canada. The financials and materials sectors did most of the heavy lifting, although the consumer staples, telecommunications and healthcare sectors outperformed. Macquarie Group was weighed down by negative earnings guidance. The benchmark S&P/ASX 200 closed up 34.3 points, or 0.8 per cent, at a four-week high of 4575.5. The index was up 5.9 per cent in the past eight days, after hitting 4313.9 on August 25. On the charts, it was approaching resistance from a potentially bullish "inverse head-and-shoulders" pattern, near 4588, as well as the June 21 peak at 4622.0. On Friday, the S&P 500 rose 1.3 per cent as stronger-than-expected US non-farm payrolls data outweighed news of weaker-than-expected US services sector data. Traders were awaiting direction from Wall Street, especially given that most US investors are due to return to work this week after their seasonal holidays. Goldman Sachs traders said recent gains on Wall Street lacked conviction because they occurred on very low volume. They also said further gains in the Australian sharemarket would be harder to come by, given it was trading near the top of its recent range. Attention now turns to the Reserve Bank of Australia's board meeting today, ahead of a two-day meeting by the US Federal Open Market Committee. "Equity markets won't have any direction from the US market early this week, but I think it would be broadly positive for sentiment if our market can hold steady over the next two days," said Jamie Spiteri, head of trading at Shaw Stockbroking. "Takeover activity in the materials sector in particular is certainly giving some attention to second-tier resources. I also believe that markets are starting to price out a double-dip US recession." In the resources sector, Andean Resources jumped 9.4 per cent to $7, after confirming late last week that Goldcorp and Eldorado Gold Corporation were bidding for the company. Lynas Corporation surged 15 per cent to $1.24, after the miner upgraded its estimate of rare earth oxide resource at Mount Weld by 19 per cent, while also increasing the weighting of its resource estimate towards scarcer heavy rare earths. Newcrest Mining took a breather, down 1.4 per cent to $38.19, while Fortescue rose 2.9 per cent to $4.94. Rio Tinto added 1.6 per cent to $75, while market heavyweight BHP Billiton rose 0.6 per cent to $38.55. Among financials, major banks rose 0.8 per cent to 1.6 per cent, following US peer gains, but Macquarie fell 4.7 per cent to $35.25 after warning that its earnings would likely be down 25 per cent in the first half. AMP fell 2.9 per cent to $5.06. Telstra rose 1.4 per cent to $2.86, outperforming the broader market amid growing expectations the Labor Party will form a minority government this week. Traders were focusing on the $8 billion of compensation that Labor has committed to paying Telstra for NBN Co to use its infrastructure, which is estimated to be worth about 90c a share.

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