The Australian stockmarket has closed lower despite a positive start, as investors stayed on the sidelines ahead of commentary from US Federal Reserve chairman Ben Bernanke tonight AEST.

At the official market close, the S&P/ASX200 fell 0.29 per cent to 4,617.5 points. The broader All Ordinaries, meanwhile, took off 0.26 per cent to 4,664.9 points.

The extent of the rise in the local bourse had been disappointing given the strength of the lift in United States markets, according to RBS Morgans private client adviser Trent Muller.

IG Markets analyst Ben Potter said "Despite the highly positive US session, the local market has been unable to sustain its advances, perhaps cautious ahead of tonight's FOMC [US Federal Reserve Open Market Committee] meeting and the growing prospect of an earlier-than-anticipated rate hike from the RBA."

Most of the big banks were in the red, with National Australia Bank losing 0.38 per cent to $25.76, and Westpac Banking Corp reversing 0.46 per cent to $23.32.

ANZ Banking Group dropped 0.66 per cent to $23.80 even after revealing plans to accelerate its China expansion by opening 20 outlets in the country over the next three years.

Commonwealth Bank of Australia bucked the downward trend as it rose 0.07 per cent to $52.62.

Resources were mixed after predictions from the Australian Bureau of Agricultural and Resource Economics (ABARE) that iron ore and coal prices will increase in the year to June 2011.

Market heavyweight BHP Billiton finished 0.15 per cent weaker at $38.72, after takeover target Potash Corp urged shareholders to reject BHP's $US39 billion offer.

Its fellow resource giant Rival Rio Tinto strengthened 0.33 per cent to $75.23 while Australia's third-largest miner Fortescue Metals Group shed 0.61 per cent rise to $4.85.