The Australian share market closed slightly firmer, buoyed by resources and energy stocks.

The benchmark S&P/ASX200 index was up 9.8 points, or 0.21 per cent, at 4,766.9 points, while the broader All Ordinaries index had risen 9.7 points, or 0.2 per cent, to 4,850.9 points.

On the ASX 24, the December share price index futures contract was up 18 points at 4,778 points, with 108,098 contracts traded, a day ahead of the contract's expiry.

AGL's shares slumped 78 cents, or 4.92 per cent, to $15.07.

Origin Energy shares were in a trading halt on Tuesday and last traded at $16.80.

Major resources stocks were stronger, with BHP Billiton up 21 cents at $45.65, Rio Tinto firming 13 cents ao $87.90 and Woodside Petroleum advanced strongly, adding 61 cents, or 1.43 per cent, to $43.36.

Among financials banks were mixed, with Commonwealth Bank, ANZ Banking Group and National Australia Bank losing ground as the Senate Economics Committee inquiry into banking sector competition continued for a second day.

Westpac firmed 10 cents to $23.00.

Bank of Queensland fell 15 cents or 1.37 per cent to $10.82 after losing 3.52 per cent on Monday.

Retailers ended mostly in positive territory, with grocery giant Woolworths gaining six cents to $26.46, Myer Holdings added four cents to $3.50 and Kathmandu Holdings climbed three cents to $1.30.

Major media stocks lost ground, with News Corporation slumping 38 cents, or 2.3 per cent, to $16.13 and its non-voting scrip down 32 cents, or 2.17 per cent, to $14.40.

Fairfax Media eased one cent to $1.40.

PanAust Ltd was the top traded stock by volume with 80 million shares traded for $64.4 million.

PanAust's stock surged eight cents, or 10.74 per cent, to 82.5 cents.

Preliminary national turnover reached 2.59 billion shares, worth $4.51 billion, with 583 stocks up, 573 down and 360 unchanged.

The Australian dollar rallied sharply in Asian trade Tuesday, pushing the currency to its highest levels in a month against the U.S. dollar.

Australian bond prices moved higher on both ends of the curve in a light volume session ahead of a roll over in the December bond futures contract to March.

Setting off a considerable drop in the U.S. dollar was a fall in U.S.

Treasury yields overnight, failure of the U.S. dollar to break above a key technical level against the euro and a Moody's Investors Service report that the proposed U.S. tax package increases the chance of a negative outlook being placed on the country's AAA rating in the next two years.

The Australian dollar traded at $0.9955, up from $0.9851 late Monday.

Against the Japanese yen, the currency traded at 83.075, up from 82.87.