Investor sentiment was boosted today by a positive lead from Wall Street, firmer commodity prices and the Reserve Bank's decision to leave interest rates on hold. The All Ordinaries Index (XAO) rose by 32.1pts or 0.7pct to 4586.5 while the S&P/ASX 200 Index (XJO) gained 30pts or 0.7pct to 4571.6.

The materials sector rose 1.4pct, boosted by solid gains on the London Metals Exchange overnight. Index leader BHP Billiton (BHP) added 1.7pct to $40.98 while Rio Tinto (RIO) gained 2.6pct to $73. Rio, which was the second-best performing stock on the S&P/ASX50, announced plans to spend US$170 million ($A188 million) to develop the next stage of an iron ore project in Guinea.

Crude oil prices rallied to three month highs overnight, helping the energy sector increase by 0.6pct. Shares in Nexus Energy (NXS) soared 23pct to $0.375 on speculation Royal Dutch Shell was planning a $480 million takeover for the company. NXS denied the rumours.

In the financial sector, a broker upgrade for Macquarie Group (MQG) saw its share price rise by 4pct to $39.55. Most of the majors were stronger, with the exception of the NAB (NAB), which closed down 0.6pct to $25.16.

Retail trade rose by 0.2pct in June after a similar increase in May. Non-food retailing was up 0.5 per cent. Retail trade was up 0.8pct in the June quarter. Shares in Woolworths (WOW) fell 0.1pct to $25.75 while Wesfarmers (WES) was lower by 0.4pct to $31.29. Among consumer discretionary stocks, David Jones (DJS) clawed back a little ground, in the wake of a $37 million lawsuit filed against the company yesterday. DJS added 0.4pct to $4.78 while Myer Limited (MYR) was up 1.7pct to $3.51. Harvey Norman (HVN) increased by 0.6pct to $3.52.

For the third straight month the Reserve Bank has elected to leave the cash rate at 4.5pct. The Reserve Bank Board continues to judge current monetary policy settings to be appropriate and the stance of policy can be best seen as "neutral" at present.

In other economic news today. the outlook for home builders has weakened. New dwelling approvals fell for the fifth time in six months, down by 3.3pct in June.

The Australian dollar ended the day´s trade at US91.02c.

On the market overall, a total of 2.24 billion shares were traded, worth $4.96 billion. 624 were up, 430 were down and 339 were unchanged.

At 4.30pm AEST on the Sydney Futures Exchange, the Share Price Index (SPI) futures contract was at 4537, up 32pts.

Ahead tonight, personal income, car sales and factory orders data are released in the US.