THE Australian share market closed higher today, boosted by positive commentary from the central bank and a lift in the Shanghai bourse.
The benchmark S&P/ASX200 index gained 45.3 points, or 1.04 per cent, at 4,403.6 points, while the broader All Ordinaries gained 46 points, or 1.05 per cent, to 4,418.7 points.
On the Sydney Futures Exchange, the September share price index futures contract had risen 54 points to 4,382 points, with 31,489 contracts traded.
The minutes of the Reserve Bank of Australia's July 6 board meeting, released today, said that an August interest rate rise was likely if official inflation data next week was higher than expected.
However, the central bank expects underlying inflation to have fallen even though the headline rate may be higher.
The RBA said the underlying measure of inflation would fall to be below 3 per cent - and into its preferred target zone - for the first time in three years.
RBS Morgans private client adviser Trent Muller said the RBA minutes certainly helped the local market in terms of painting a fairly positive picture on the domestic front, but still outlining some concerns associated with Europe.
"Also the Chinese market rallied for quite a bit this afternoon," Mr Muller said.
"So we got some leverage there on speculation that the Chinese government is not going to have to tighten monetary policy, moving forward, which is certainly beneficial for the resources companies."
Shares in BHP Billiton rose 55 cents to $38.30 and Rio Tinto lifted $1.47 to $66.50.
Mr Muller said the mood of investors was fairly subdued, given the recent share market volatility.
"Our reporting season effectively starts in August, so with debt concerns in Europe, most investors are sitting on their hands," he said.
In the resources sector mineral sands miner Iluka Resources was up 6 cents at $5.41 after it said its June quarter production fell following the closure of its Western Australian operations, but sales volumes were up strongly in the first half of this year.
Conquest Mining was steady at 30 cents as it said it expected to sign sales deals with two Chinese smelter companies for product from its Mt Carlton gold, silver and copper project in North Queensland.
African-focused uranium producer Paladin Energy eased 3c to $3.58 as it said it was in talks with NGM Resources Ltd ahead of a possible takeover move. NGM was in a trading halt, having last traded at 9.3 cents.
Among other stocks, Qantas Airways ascended 11 cents to $2.38 while luxury department store chain David Jones picked up two cents to $4.57.
Airport owner MAp Group rose six cents to $2.88 as it said passenger traffic at its three airports grew in June, with the strongest performance at Sydney Airport.
The price of gold was $US1183.62 per fine ounce, down $US7.91 on Monday's close of $US1191.53.
The top-traded stock by volume was Arrow Energy, with 62.8 million shares worth $293.03 million changing hands.
Arrow was 33 cents lower at $4.67.
Market turnover was 1.69 billion shares worth $4.81 billion, with 606 stocks up, 395 down and 318 unchanged.
On Wall Street on Monday, the Dow Jones Industrial Average index lifted 0.56 per cent to 10,154.43 points.
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