Shares pared an early rise as profit-taking emerged before the release of US non-farm payrolls data due overnight.
Strong earnings results from Westpac and Macquarie Group, together with a jump in resources stocks initially boosted the market, but bank stocks later retreated.
"There's a bit of fatigue setting in before US payrolls data and that's going to be the key short-term influence next week," said CMC Markets chief market strategist Michael McCarthy.
The benchmark S&P/ASX200 closed down 0.5 points at 5129.5 after an early jump to 5183.2.
Macquarie Group surged 11 per cent after net profit for the year to March 31 jumped 17 per cent to $851 million, fuelled by a 54 per cent rise in its market-facing divisions. Chief executive Nicholas Moore said profit could rise further in the current year.
JB Hi-Fi jumped 8.1 per cent on stronger earnings guidance. The electrical goods retailer said it expects net profit for the year through June to be in a range of $112 million to $116m, representing an 11 per cent increase on the previous year at the top end. The forecast was at least 7 per cent above previous guidance.
However, Westpac ended down 1 per cent after initially rising 2.6 per cent as its first-half profit rose 10 per cent to $3.5 billion, beating market expectations by about 4 per cent. The bank also raised its interim dividend to 86c a share as widely expected, while announcing a fully franked special dividend of 10c a share.
"The key question will be how long the perfect operating conditions of mortgage repricing, higher trading profits and lower impairment that is supporting growth can last," Macquarie analysts said of Westpac's results.
Commonwealth Bank fell 2 per cent, while National Australia Bank, which is due to report its earnings next Thursday, fell 0.3 per cent. ANZ rose 0.3 per cent.
BHP Billiton rose 0.6 per cent after the European Central Bank lowered its policy interest rate by 0.25 per cent as widely expected, and US weekly jobless claims hit a five-year low.
London Metals Exchange copper rose 0.8 per cent overnight, while Nymex crude oil rose 3.3 per cent and gold gained 0.7 per cent. However, spot iron ore fell 3.5 per cent and nickel declined 3.7 per cent.
CMC Markets' Mr McCarthy said a potential domestic interest rate cut next week could be supportive for yield plays and consumer discretionary stocks.
Still, Australian shares are at risk of a correction in the next few months, particularly if fear about a global growth soft patch continues to escalate, with the market heading into a seasonally weak time of year, said Shane Oliver, who oversees about $126bn as director of investment strategy and chief economist at AMP Capital.
Mr Oliver expects any setback in shares to be in the order of 5 per cent to 10 per cent, rather than the 15 per cent to 20 per cent seen around mid-2010 and mid-2011.
"Shares are still far from expensive, monetary conditions are very easy, the gradually strengthening global growth outlook led by the US points to stronger profits ahead and investors are likely to increasingly switch from low yielding cash and bonds ensuring solid 'buy on the dips' demand," he said.
"A pickup in mergers, share buybacks and dividends from cashed up companies is also likely to be a positive for shares this year."
