The Australian share market posted its strongest finish in five trading days after an expected increase in the cash rate by the Reserve Bank of Australia.

The benchmark S&P/ASX200 index was up 15.4 points, or 0.33 per cent, at 4,701.9 points, while the broader All Ordinaries index firmed 15 points, or 0.32 per cent, to 4,709.9 points.

On the Sydney Futures Exchange at 1615 AEDT, the March share price index futures contract was nine points higher at 4,699 on volume of 25,809 contracts.

CommSec market analyst Juliette Saly said the RBA's decision to raise the cash rate by 0.25 per cent to 4.0 per cent was no surprise and had already been factored in by the market.

All eyes were on the major banks to see which would be first to raise interest rates, Ms Saly said.

National Australia Bank was the only major lender to lose ground, inching one cent lower to $25.60 amid concerns it will pay too much to acquire AXA Asia Pacific Holdings.

Commonwealth Bank put on 47 cents to $54.92, Westpac rose 20 cents to $26.73 and ANZ appreciated 24 cents to $23.83.

Ms Saly said the copper price had risen sharply overnight in response to the earthquake in Chile.

"Investors are very much thinking that copper production is going to be impacted," she said.

Rio Tinto was up 62 cents at $72.02 while fellow mining giant BHP Billiton lifted 11 cents to $41.09. Both companies announced over the weekend that their copper production had not been hampered by the earthquake.

Shares in Telstra closed at an all-time low of $2.93, down one cent, after 73.6 million shares changed hands and made it the third-most traded stock by volume.

Telstra said it was concerned about the federal government's draft legislation that would govern the operation of the national broadband network.

In other headlines on Tuesday, gaming firm Tatts Group says its $850 million acquisition of NSW Lotteries from the NSW government is a natural extension of its lotteries businesses and will drive significant operating efficiencies.

Shares in Tatts were down 18 cents, or 7.26 per cent, to $2.30.

Agricultural chemicals firm Nufarm says it will post a headline loss of about $40 million in the first half of its fiscal year but expects to make a profit for the full year.

Shares in Nufarm were down 28 cents, or 2.87 per cent, to $9.47.

Qantas shares added eight cents to $2.70, and Virgin Blue Holdings was one cent higher at 64 cents after announcing John Borghetti would succeed Brett Godfrey as chief executive.

Among energy stocks, Woodside was up 61 cents to $44.08.

Papua New Guinea liquefied natural gas project joint venture partners Oil Search and Santos gained ground after a long-term sales deal with CPC Corporation of Taiwan was finalised.

Oil Search was up 12 cents to $5.36 and Santos put on 30 cents to $13.40.

Gold miner Newcrest was up 37 cents at $32.51 and Lihir Gold gained four cents to $2.78 after it unveiled plans to increase production by about 50 per cent over the next 10 years.

The spot price of gold in Sydney was US$1,116.70 per fine ounce at 1625 AEDT, down US$1.83 on Monday's closing price of US$1,118.53.

Among retails, Woolworths was 22 cents stronger at $27.76 and Coles owner Wesfarmers eased 50 cents to $32.10.

Major media stocks were mixed.

Fairfax inched 2.5 cents lower to $1.64, News Corp found 17 cents to $17.87 and its non-voting scrip was up 14 cents at $15.17.

Air purification products investment firm AFT Corporation was the top traded stock by volume with 101.8 million shares worth $103,194 changing hands.

AFT's shares were steady at 0.1 cents.

Preliminary market turnover was 2.11 billion shares, worth $4.94 billion, with 504 stocks up, 543 down, and 381 steady.