SYDNEY (AFP) -- Australian share prices closed up 0.83 percent at a new record high Tuesday as investors bought blue chip stocks including miners and banks, dealers said. They said investor sentiment remained strong as the reporting season picked up steam, with BHP Billiton due to release an expected record half-year net profit of over six billion dollars.

The key S and P/ASX 200 ended up 48.4 points at 5,870.5, surpassing Friday's record of 5,831.5.

The broader All Ordinaries index climbed 43.4 points to 5,848.5, beating the previous record of 5,814.4 set last Friday.

A total of 1.74 billion shares worth 5.5 billion dollars (4.3 billion U.S.) were traded, with falls outnumbering rises 634 to 593 while 337 stocks were unchanged.

BHP Billiton shares advanced 0.27 dollars or 1.02 percent to finish at 26.68 dollars while Rio Tinto rose 0.41 or 0.54 percent to 75.90.

Reynolds and Co private client advisor Michael Heffernan said the bank sector also led the market higher as investors bet on the central bank keeping interest rates on hold on Wednesday.

"The banks are having a fairly good run but you have to question their P/E's (prices earnings multiples) -- they're up over 15 times now compared with 13.5 times six months ago when they were saying the trading environment was becoming more competitive," Heffernan said.

National Australia Bank climbed 0.57 to close at 41.28, Commonwealth Bank rose 0.68 to 51.12, ANZ jumped 0.48 to 29.86 and Westpac advanced 0.36 to 25.55.

However, investment bank Macquarie fell on profit taking after announcing it expects to report a lower second-half net profit to March from the record 730 mln and recorded in the first half.

Macquarie Bank shares lost 2.48 or 2.96 percent to finish at 81.40.

Heffernan noted that despite Tuesday's gains, BHP and Rio appeared relatively cheap, trading on historical PE's of 11.4 times and 10.8 times respectively.

"They've been knocked around a bit because of volatile commodity prices which is more to do with hedge funds selling rather than fundamentals -- but metal prices are going to stay high in historical terms so you would have to think there's value in BHP and Rio," he said.

Dealers said property group Centro Properties rose after reporting a rise in first half net profit to 157.3 million dollars from 130.9 million the year before. Centro shares gained 0.19 or 2.07 percent to close at 9.35.

Beef farmer Australian Agricultural Co rose following a positive outlook for world beef markets and recent rains, despite announcing a 40 percent drop in 2006 net profit to 10.1 million dollars.

AAC shares jumped 0.13 or 6.19 percent to end at 2.23.