Australia Markets closed

Aust shares edge higher

The Australian share market is trading slightly higher in early trade after positive cues from Wall Street, but is expected to remain rangebound as volumes wind down ahead of the Christmas break.

The benchmark S&P/ASX 200 index was up 0.3 per cent within the first hour of trade, with banks, airlines and retail-focused shares among the gainers.

"The market is a bit flat, given that the rally has been strong so far. The momentum remains positive, but we could see a bit of pullback later in the week," Macquarie Private Wealth division director Lucinda Chan said.

Overnight, Wall Street extended a recent rally but finished the session short of earlier highs. The Dow Jones industrial average rose 0.20 per cent, and is now less than one per cent away from 20,000, a level it has never breached. The S&P 500 ended up 0.20 per cent.

In the local market, banking stocks were the mainstay of early trade on Tuesday, with all four major banks rising between 0.5 to 1.0 per cent.

Energy shares were slightly weaker as oil prices settled lower. Woodside, Oil Search and Santos were each down around one per cent.

However, airline shares were trading higher, with Qantas up 1.3 per cent at $1.20 and Virgin shares gaining 2.3 per cent at 22.5 cents.

Mining giants BHP Billiton and Rio Tinto were down 0.8 per cent and 0.7 per cent respectively, but rival Fortescue gained 1.2 per cent to $6.07 after ratings agency S&P raised the company's credit rating.

KEY FACTS:

* At 1043 AEDT, the benchmark S&P/ASX 200 index was up 16.9 points, or 0.3 per cent, at 5,579 points.

* The broader All Ordinaries index was up 15.9 points, or 0.28 per cent, at 5,628.7 points.

* The March share price index futures contract was up five points at 5,533 points, with 7,286 contracts traded.

* National turnover was 589.4 million securities traded, worth $686 million.