The sharemarket has closed higher, buoyed by hopes that leaders in the United States can negotiate a compromise over the looming fiscal cliff.

The benchmark S&P/ASX200 index added 24.6 points, or 0.6 per cent, to 4361.4, while the broader All Ordinaries gained 22.5 points, or 0.5 per cent, to 4382.6.

The US fiscal cliff has been weighing on investors, leading to a nearly 3 per cent sell-off on the local market last week, but the meeting of leaders from both the Democrats and the Republicans on Friday raised hopes an agreement could be reach before automatic tax increases and spending cuts come into affect on January 1, 2013.

As a result, all sectors on the ASX finished higher, energy jumped 2.3 per cent, telecommunications, gold and health all rose 1.2 per cent, materials added 0.6 per cent and financials inchedup 0.2 per cent.

Telstra at four-year high

Telstra rose to its highest close in more than four years at $4.17 as the stock continues to benefit from a preference for defensive stocks.

‘‘The US fiscal cliff has been weighing on investor sentiment for the last few weeks, [and now] the Israel-Hamas conflict. That’s prompting a lot of allocation into defensive names, in this sort of environment you’ll typically see rotation into safe haven stocks and Telstra would certainly apply,’’ said BBY institutional dealer Anson Rosewall.

The big miners were mixed today, with BHP being one of the markets biggest drivers, jumping 0.9 per cent to $33.21, while rival Rio Tinto slipped 0.3 per cent to $56.71. Iron ore miner Fortescue dropped 1.3 per cent to $3.85.

Energy exploration Santos enjoyed a nice push up today after it announced a large discovery of gas off the coast of Western Australia’s Kimberly region. Its shares finished up 3.9 per cent at $11.30.

Billabong surges

Struggling surfwear retailer Billabong finally found some good news for investors, with Paul Naude, the head of its US operations, advising the board that he would be holding talks with financiers about a possible leveraged buyout of the company.

‘‘The fundamentals of the business are still struggling,’’ said Mr Rosewall. ‘‘While its good news for the stock, it’s a real question of how the director is going to be able to finance it and until we get a little more clarity about that, investors will still be very cautious.’’

Billabong shares surged 10.1 per cent to 81.5 cents.

Among the banks, ANZ and Westpac traded relatively flat at $23.56 and $24.40 respectively, while CBA slipped 0.2 per cent to $58.15 and NAB rose 0.7 per cent to $23.36.

US markets will be closed on Thursday and for a half a day of Friday for Thanksgiving, likely leading to a quiet week, barring unforeseen events, due to a lack of solid leads from overseas, said Mr Rosewall.