The Australian share market has hit 19-month highs on the last full day of trading for 2012, buoyed by gains among resources stocks.
The benchmark S&P/ASX 200 index rose 23.3 points to close at 4671.3, its highest close since June 2, 2011. The broader All Ordinaries index closed 23.9 points - 0.5 per cent - better at 4685.3.
The ASX200 is on track to post gains of about 15 per cent for the year, its biggest rise since a 31 per cent recovery in 2009 after the 2008 slump.
Despite much talk about the fiscal cliff and how it would impact on stocks, Commsec market analyst Steve Daghlian said the Australian market is taking its own lead.
‘‘It is quite impressive but volumes are extremely light so despite the gains it can’t be taken too seriously,’’ he said.
Local miners were supported by robust gains in spot iron ore prices, which have climbed to eight-month highs at $139.40. Among the big miners, BHP is 1.1 per cent higher to $37.40, Rio Tinto is 1.7 per cent higher to $66.53 and Fortescue is 2.4 per cent higher to $4.64.
US stocks edged lower but recovered some ground in the last hour of trade on reports that leaders would meet this weekend after Senate Majority Leader Harry Reid had earlier a compromise was unlikely before the January 1 deadline.
The White House and Congress have until New Year’s Eve to reach a compromise on how to avert the fiscal cliff, a year-end crisis that could lead to stiff tax hikes and drastic budget cuts that might halt growth.
While the cliff talks continued to dominate market sentiment, no-one really knew what the result would be despite several weeks of optimism, said IG Markets market strategist Stan Shamu.
‘‘No-one really knows what’s going on to be honest, everyone is just responding or reacting to these headlines for now,’’ he said.
Other anlysts said the effects of the fiscal cliff debate could rattle on in to the new year.
‘‘That is going to be an influential factor for how we are going to start 2013,’’ said Bruce McLeary, analyst at Burrell & Co in Brisbane.
‘‘If an agreement doesn’t go through there could be some weakness,’’ Mr McLeary said.
Stocks in the retail space were mixed following yesterday’s gains on reports suggesting strong and possibly record high Boxing Day sales.
JB Hi-Fi was 9 cents, or 0.9 per cent, higher at $10.35, Myer was two cents firmer at $2.15 and David Jones also advanced two cents to $2.43.
Bank shares also gained ground following falls for three of the four majors on Thursday.
The Commonwealth Bank gained 13 cents to $62.25, Westpac lifted 17 cents to $26.27, ANZ closed nine cents higher at $25.00 and NAB rose by seven cents for the second day in a row, closing at $25.02.
National turnover was light with 874.6 million securities worth $1.53 billion changing hands, with 491 stocks up, 323 down and 338 unchanged.
Trading on New Year's Eve will close at 1410 AEDT.