The Australian sharemarket ended the day in positive territory despite gains being shaved in afternoon trade.

At the 1615 AEST official market close, the benchmark S&P/ASX200 index improved 0.25 per cent to 4,626.5 points, its highest level since May 17. The broader All Ordinaries index gained 0.32 per cent to 4,669.1 points.

Among the sectors, materials firmed up 1 per cent and energy added 0.8 per cent. Financials were flat, while IT shares shed 1.5 per cent.

The sharemarket pulled back after an initial surge, with banking stocks and the big miners underpinning the day's gains, according to CMC Markets senior dealer Rob Mulcahy.

Eevn with the late retreat, the ASX200 managed to close above 4622 points, prompting technical traders to consider today's action a "break-out" that signals a move into a new, higher trading range. Traders said the initial target level is 4720, with the possibility of testing the 2010 high at 5025.

Financial stocks eased, with Commonwealth Bank of Australia stepping up 0.16 per cent to $53.60 while Westpac Banking Corporation slid 0.08 per cent to $23.37.

ANZ Banking Group was flat at $24.02 amid reports it may have breached consumer laws in harassing debtors and seizing money from their accounts.

National Australia Bank finished unchanged at $25.22 after it appointed Andrew Hagger as group executive, corporate affairs and marketing.

Westpac lost 2 cents to $23.37 and ANZ was 1 cent stronger at $24.02. Australia's largest investment bank, Macquarie Group, swelled 1.27 per cent to $35.70.

The major miners also softened at the close, with BHP Billiton adding 49 cents, or 1.3 per cent, to $39.05. Fellow mining giant Rio Tinto lost 15 cents, or 0.2 per cent, to $75.15.

Junior miner Fortescue Metals added one per cent to $5.02.