The Australian share market has edged higher as investors react to positive news out of China and uncertainty in the United States.

The S&P/ASX 200 dropped off in afternoon trade on Wednesday, which Stock Report analyst Benny Sada said reflected market uncertainty about a key US Federal Reserve meeting.

The Federal Open Markets Committee (FOMC) is expected to make an announcement on Thursday Australian time about the tapering of its stimulus measures to the world’s largest economy.

“There’s just that uncertainty,” Mr Sada said.

“A lot of market participants are looking towards that meeting for clues on how the US central bank intends to scale back its monetary easing policy.”

He said he believed the local market had rallied during the day on the back of positive comments from the Chinese government on economic growth.

“A bit of good and a bit of bad today,” Mr Sada said.

“We had some good news out of China, countered by uncertainty ahead of the US central bank meeting.”

High-yield retail and banking stocks were the strongest performers on Wednesday.

The big four banks were all higher, with ANZ up 30 cents at $29.89, Commonwealth Bank up 47 cents at $74.50, NAB was up 17 cents at $31.36 and Westpac was 22 cents higher at $31.08.

In the retail sector, Wesfarmers was up 34 cents to $40.56.

“All these stocks were up quite strongly early on,” Mr Sada said.

“That’s where we saw most of the movement.”

Australia’s largest miners were down, with BHP Billiton 31 cents lower at $34.64, and Rio Tinto was 20 cents lower to $57.51.

“The weight of the market, including a pretty bearish night in commodity markets overnight, had an impact on our miners,” Mr Sada said.

KEY FACTS

* At close on Wednesday, the benchmark S&P/ASX200 index was up 4.8 points, or 0.1 per cent, higher at 5,052.

* The broader All Ordinaries index was up 9.4 points, or 0.19 per cent, at 5,035.7.

* On the ASX 24, the September share price index futures contract was up two points at 5,009 points, with 29,371 contracts traded.

* National turnover was 1.3 billion securities worth $3 billion.