AUSTRALIAN shares ended a holiday-shortened trading session modestly higher today,with gains in the mining and financial sectors pushing the market to an 18-month high.
The rise sets the market up to end the year almost 14 per cent higher,although traders said investors remained concerned over the global impact of the"fiscal cliff",the package of US spending cuts and tax increases set to come into effect at the start of next year unless lawmakers can agree on measures to avert it.
"The world will just have to hold its breath until(US)leaders get back from their holidays,"said Stan Shamu,a market strategist at IG,adding the Australian market was likely to remain trading in a tight range until after fiscal-cliff talks resume later in the week.
The benchmark S&P/ASX 200 index ended the day up 0.3 per cent at 4635.2.The materials subindex also rose 0.3 per cent,powered by a 0.4 per cent advance for BHP Billiton and 0.2 per cent gain for rival Rio Tinto.Both mining companies have benefited from a rebound in iron ore prices in recent weeks.
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THE Australian dollar was little changed,with attention fixed on faltering budget talks in the US.
US cliff threat to bullish equities
THE local market's stellar finish to the year could be curtailed by faltering US efforts to avoid the"fiscal cliff".End of sidebar.Return to start of sidebar.
The broader All Ordinaries index was up 10.4 points,or 0.22 per cent,at 4645.6.On the ASX 24,the March share price index futures contract was up 21 points at 4613.
Fortescue Metals,the third-largest producer of iron ore in the country,declined 0.7 per cent in what Mr Shamu said was likely profit taking following a strong recovery in its share price.
Gold producers also ended firmer,with Newcrest Mining up 1 per cent,St Barbara up 1.8 per cent,and Alacer Gold 6.7 per cent higher.
There were slight gains among financial stocks,led by a 0.5 per cent rise in Commonwealth Bank.
One to watch when trading resumes after the Christmas break is surfwear retailer Billabong,which recovered from recent weakness to end up 0.6 per cent after agreeing to open its books to suitors.
Analysts have expressed doubt a takeover would ultimately be successful,while Billabong has said due diligence for the$US527 million offer from the former head of its US operations and private equity firm Sycamore Partners was likely to last six weeks.
Macmahon Holdings lost 4.3 per cent after saying it expected one-time restructuring and redundancy costs of about$12m,which will eat into the$14m it expects from the sale of most of its construction projects to Leighton.
Lend Lease Group ended 0.2 per cent higher after reporting that it was selected to tender for a highway-upgrade contract worth an estimated$500m.
The market re-opens on Thursday,with a quiet week expected as no economic data will be released and other major markets around the world operating limited trading sessions around Christmas.
