At midday AEDT, the benchmark S&P/ASX200 index was up 6.1 points, or 0.13 per cent, at 4866, while the broader All Ordinaries had added seven points, or 0.14 per cent, at 4869.5 points.
On the Sydney Futures Exchange, the December share price index contract was five points higher at 4873, on a volume of 8451 contracts.
Bell Potter Securities senior client adviser Stuart Smith said he expected the market to ease before close today.
"It's still overcooked," he said.
"The IMF said our banks are exposed to $33 billion worth of writedowns, but the market is like a D9 Catepillar - it just keeps bulldozing through any negativity on its way up."
Research in an IMF working paper released yesterday found that, although the positions of Australian banks were sound, they still faced potential losses of up to two per cent of total loans through corporate and household defaults, The Australian Financial Review reported today.
"We've issued so much stock via share purchase plans that we've diluted companies' assets by more shares at a time when earnings are going to ease off," Mr Smith said.
"So the banks' reporting season will be the testing time (for the market)."
Commonwealth Bank was ripe for profit-taking, Mr Smith said.
CBA shares eased 10 cents to $55.42, National Australia Bank lost six cents to $31.69, ANZ Banking Group fell five cents to $24.86, but Westpac Banking Corporation added 18 cents to $27.28.
Bank of Queensland surged 82 cents, or 6.51 per cent to $13.42, as investors digested a 21 per cent lift in 2008/09 cash net profit reported yesterday.
A stronger crude oil price in offshore markets overnight continued to push energy stocks higher.
Santos gained 28 cents, or 1.8 per cent to $15.82, Oil Search added six cents to $6.86 and Woodside Petroleum lifted 63 cents, or 1.18 per cent to $53.83.
Jump in energy demand fuels stocksShares claw back early losses
