The Australian share market closed moderately higher on Tuesday, led by strong gains in the finance sector. But gains were tempered by weakness in the materials sector. The benchmark S&P/ASX200 index was up 12.3 points, or 0.26 per cent at 4,700.3 points, while the broader All Ordinaries index had risen 9.5 points, or 0.2 per cent, to 4,782.8 points. On the ASX 24, the December share price index futures contract was up six points at 4,713, with 32,125 contracts traded.

The local market overlooked a mixed lead from Wall Street to open about 0.3 per cent firmer, but dipped into the red by noon. However, a late afternoon rally helped push the two broad market indices into positive territory at the close. The S&P/ASX200 financials index, which tracks the performance of financial stocks on the local market, finished up 0.91 per cent. Better performers within the index included Charter Hall Group, which gained 5.29 per cent, or 12 cents, to $2.39 and Goodman Group, which climbed 3.28 per cent, or two cents, to 63 cents.

In other financial news, five AXA Asia-Pacific directors including chairman Rick Allert have recommended its shareholders accept a $13.3 billion sweetened, third takeover offer from wealth manager AMP. A sixth, unnamed director was awaiting more information before declaring their position, AXA said on Tuesday. AXA finished up eight cents, or 1.25 per cent, at $6.25, while AMP ended down 19 cents, or 3.49 per cent, to $5.26. Among the big retail banks, ANZ ended up 14 cents at $23.22, Commonwealth Bank finished up $1.03, or 2.11 per cent, at $49.89, National Australia Bank rose 11 cents to $24.78 and Westpac gained 28 cents, or 1.28 per cent, to $22.20.

The materials sector closed down 0.09 per cent, according to the S&P/ASX200 materials index. Among resources stocks, BHP Billiton gained 31 cents to $44.45 after chairman Jac Nasser defended the mining giant's failed $40 billion bid for Potash Corporation of Canada, at the company's annual general meeting in Perth.

Rio Tinto closed down 60 cents at $86.44 and Fortescue Metals advanced three cents to $6.78. In other news on Tuesday, rural services provider AWB shareholders backed a proposed takeover by Agrium Inc. AWB closed up half a cent at $1.495. The spot price of gold in Sydney was $1,363.10 per ounce, down $1.42 from Monday's close of $1,364.52. Newcrest Mining closed down 56 cents, or 1.34 per cent, at $41.10.

The most traded stock by volume was Continental Coal, with 131.46 million securities changing hands for $9.92 million. Continental, which said it had completed the financial settlement of a $A35.63 million acquisition in South Africa, finished up one tenth of a cent at 7.3 cents. Preliminary market turnover was 2.84 billion securities for $5.80 billion, with 499 stocks up, 628 down and 383 unchanged.

The Australian dollar nudged higher in Asia's Tuesday session as sentiment over Europe's debt crisis remains the key driver. The Australian dollar traded at $0.9864, up from $0.9849 late Monday. Against the Japanese yen, the currency traded at 81.495, from 81.43.