Market closes higher

THE share market closed marginally higher amid directionless trading ahead of the US Federal Reserve's monetary outlook meeting in the United States. The benchmark S&P/ASX200 index was up 10.1 points, or 0.27 per cent, at 3,807 points after drifting to a low of 3767 around midday AEST.

The broader-based All Ordinaries index edged 9.2 points higher, or 0.24 per cent, to 3802.2 points.

On the Sydney Futures Exchange, the September share price index contract finished one point higher at 3,768 on a volume of 24,945 contracts.

Shaw Stockbroking senior dealer Jamie Spiteri said the market was largely directionless after yesterday's three per cent slump.

"You've got the market making a pause despite the fact there may be accelerated activity in the likes of Rio Tinto with its rights issue finishing here today," he said.

Investors pushed shares in Rio Tinto 99 cents, or 2.04 per cent, higher to $49.60 ahead of its $US15.2 billion ($A19.14 billion) rights issue.

Shares in the world's largest miner, BHP Billiton, eased seven cents to $33.73.

IG Markets research analyst Ben Potter said buyers sat on the sidelines ahead of tomorrow's meeting of the US Federal Reserve in Washington DC.

While the US federal funds rate was expected to remain unchanged, the Federal Open Market Committee statement would be closely read for clues about the US central bank's thinking on the economy.

Westfield Group surged 52 cents, or 4.93 per cent, to $11.07 after its US peer, Simon Property Group, rallied overnight, Mr Potter said.

Mr Spiteri said the banking sector had picked up from its earlier lows, which helped drive the wider market higher.

Among the major banks, Westpac eased one cent to $19.21, Commonwealth Bank gave up 19 cents to $37.03.

National Australia Bank lost 24 cents to $21.45 and ANZ Banking Group fell three cents to $16.00.
Oil stocks were mixed, with Woodside Petroleum finishing $1.09 higher at $41.36, Santos retreating by 12 cents to $14.01 and Oil Search two cents lower at $5.27.

Newcrest Mining was the only major gold stock to lose ground, down 52 cents to $29.47.

Lihir Gold firmed one cent to $2.85 and dual-listed Newmont Mining gained seven cents to $5.17.
The spot price of gold in Sydney finished at $US927.60 per fine ounce, up $US10.05 on Tuesday's close of $US917.55.

Elsewhere in the resources sector, resources investment group Lion Selection Ltd and junior gold mining hopeful Catalpa Resources Ltd agreed to merge to create a mid-tier producer of the precious metal.

Catalpa's shares finished 1.7 cents, or 19.32 per cent, higher at 10.5 cents, while Lion Selection jumped 34 cents, or 33.3 per cent, to $1.36.

The media sector presented a mixed picture, with Fairfax Media two cents softer at $1.165, while Consolidated Media fell six cents to $2.23.

News Corporation added one cent to $13.00, and its non-voting scrip advanced four cents to $11.63.

Ten Network Holdings finished one cent firmer at $1.14 after reporting a 36.6 per cent fall in earnings for the nine months to May 31 as advertising revenue slumped.

Major retailers were mostly stronger, with Wesfarmers - owner of Coles supermarkets - jumping 67 cents to $21.90, David Jones adding three cents to $4.00 and grocer giant Woolworths closing steady at $25.49.

Entellect Solutions was the top traded stock by volume, with over 113.53 million shares changing hands for $697,851. Its share price rose 0.2 cents, or 66.7 per cent, to 0.5 cents.

Market turnover reached 2.04 billion shares worth $5.22 billion, with 484 stocks up, 543 down and 374 steady.