The sharemarket ended a three-day losing streak yesterday as the latest earnings results from US aluminium giant Alcoa reassured investors in the resources-heavy domestic bourse, with high-yield and defensive sectors of the market well bid.
Shares in Alumina, the joint venture partner of Alcoa World Alumina & Chemicals, jumped 4.6 per cent as Alcoa swung to a profit in the fourth quarter.
The world's largest aluminium maker posted a net profit of $US242 million ($230m) for the quarter, or US21c a share. That compares with a loss of $US191m, or US18c a share, a year earlier.
After experiencing intraday weakness, BHP Billiton and Rio Tinto rose slightly by the end of the trading session.
But retail stocks were weighed down by weak retail sales data. Department store chain Myer lost 2.7 per cent and retail franchise Harvey Norman declined 2.3 per cent after the Bureau of Statistics said retail sales fell 0.1 per cent on month in November, below an expected 0.3 per cent rise.
The stocks gauge -- which rose for the last seven weeks straight as investors anticipated a resolution to the US fiscal-cliff impasse -- had fallen for the past three trading sessions.
Traders said that Alcoa, traditionally the first major US company to report fourth-quarter earnings, had potential to support Wall Street overnight.
"Alcoa's results looked OK," said Morgan Stanley Wealth Management investment adviser Shannon Briggs. "But there's still evidence of profit-taking in resources in particular, even though the iron ore price went up again."
Mr Briggs said recent strength in iron ore prices might not be sustainable in the short term.
Spot iron ore was up about 80 per cent since September, partly due to supply constraints in India and Brazil. The metal rose 3 per cent to a 15-year high of $US158.50.
Some of the major banks, along with telecommunications, consumer staples and property trusts, supported the market. Westpac, National Australia Bank, Telstra, Wesfarmers, Woolworths, Westfield Holdings, Stockland and Goodman Group all rose between 0.5 per cent and 1.9 per cent.
Commonwealth Bank shares lagged the broader market as profit-taking continued after UBS lowered its rating from buy to neutral on Tuesday.
Mr Briggs also said global equity markets might face more uncertainty in light of US fiscal policy as the nation's debt ceiling had to be renegotiated in coming months, and some spending cuts were due to take effect.
The upcoming earnings season in the US and Australia could add more pressure to markets, he said.
"With Australian earnings due in February, we are seeing the market refocus on earnings," Mr Briggs said.
"Given some of the price rallies we've had, people are taking some profit in preparation for that."
In the Asian region, China will release trade data today, followed by inflation figures tomorrow.
