[Morningstar with AAP]: The Australian share market has been unable to extend its rally into a third day, fading in the late afternoon to close marginally lower despite a stupendous rally by the banking sector.

The S&P/ASX200 benchmark index dropped at the open but then steadily climbed higher by as much as 0.96 per cent by midafternoon, hitting a fresh 11-week high of 5,835.9, well past the 5,795 level indicating a 50 per cent retracement.

But then the ASX then faded in the final two hours of trading to finish Wednesday down five points, or 0.09 per cent, at 5,775 points, while the All Ordinaries index also closed down five points, or 0.08 per cent, at 5,884.9.

"Interesting day on the markets. It's a decent sell-off," said Pepperstone head of research Chris Weston.

"Things were looking so good at the start of the day and we've just tailed off."

The surge in bank stocks seemed very healthy, Mr Weston said.

"What we want to see in a bear market is a rotation into unloved spaces. We thought it was really positive the banks were going strong," he said.

The banks are one of the sectors most exposed to the economic recovery, Mr Weston said.

"Is there going to be enough juice from the market financial sector to pull the market higher? That's the question.

"Can this continue, or are people going to sell out for a quick profit? A lot of this comes down to what happens with the reopening.

"The bottom line is that there is real strength in the market. The pullback seemed to be quite limited."

Overall the financial sector rose 5.3 per cent with three of the four big banks up even more.

ANZ gained 8.6 per cent to $17.94, Westpac rose 8.0 per cent to $17.61, NAB climbed 7.8 per cent to $17.94 while CBA - which hasn't been battered as badly as the other banks in the last few months - rose 4.9 per cent to $64.30.

Also, Macquarie was up 2.1 per cent to $110.95, Bank of Queensland rose 7.5 per cent to $5.43, and Bendigo and Adelaide was up 5.7 per cent to $6.29, while Virgin Money UK soared 15.5 per cent to $1.825.

But blood products giant CSL declined 6.4 per cent to $288, dragging the index down 28.5 points.

The heavyweight mining sector was also deep in the red, with BHP falling 2.9 per cent to $34.46, Rio Tinto dipping 2.4 per cent to $91.52 and Fortescue Metals retreating 5.1 per cent to $13.08.

Goldminers were a deep shade of red, with Newcrest, Evolution, Northern Star and Saracen Minerals falling from 7.2 to 11.2 per cent.

Afterpay dropped 7.9 per cent to $45.25, a day after hitting an all-time high.

Helloworld Travel gained another 10.5 per cent to $2.42, although it is still down by half since the start of the year.

Meanwhile, the Australian dollar was buying over 66 US cents for the first time since early March.

At 1715 AEDT the Aussie was buying 66.44 US cents, up from 65.91 US cents at the close of trade on Tuesday.

ON THE ASX:

The benchmark S&P/ASX200 index closed Wednesday down five points, or 0.09 per cent, at 5,775 points

The All Ordinaries also closed down five points, or 0.08 per cent, at 5,884.9 points

At 1714 AEST, the SPI200 futures index was up one point, or 0.02 per cent, at 5,774 points

The NZX 50 added 134.45 points (1.22%) to 11,049.19 while the Nikkei gained 148.06 points (0.69%) at the time of writing, to be closed at 21,419.23

Companies commencing Ex-Dividend Trading Today (ASX 300):

Amcor Plc