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AAP

2012-11-29

Australian shares closed firmer after encouraging comments by US politicians about avoiding the "fiscal cliff".

The benchmark S&P/ASX200 index was up 30.4 points, or 0.68 per cent, at 4,477.7 points, while the broader All Ordinaries index had risen 27.5 points, or 0.62 per cent, to 4,490.1 points.

On the ASX 24, the December share price index futures contract was 38 points higher at 4,489 points, with 20,710 contracts traded.

RBS Morgans Ipswich manager Tony Russell said the Australian share market closed at its highest point of the day after gains by the mining giants and major banks.

"The lead was from a strong turnaround in the US market overnight," Mr Russell said.

"We followed on from that today, mainly led by our big miners and major banks."

Wall Street posted solid gains overnight spurred by encouraging remarks by US President Barack Obama and House Speaker John Boehner on averting looming tax hikes and spending cuts that could push the economy into recession, the so-called "fiscal cliff".

The Dow Jones Industrial Average finished 0.83 per cent higher at 12,985.11, snapping two days of losses.

Locally, big miners started the day mixed but all closed strongly.

BHP Billiton closed 21 cents higher at $34.21, despite angry shareholders at its annual general meeting accusing the company of hoarding $5 billion in surplus cash when it should be paying a special dividend.

Rio Tinto gained 48 cents to $57.18 after announcing plans to cut spending and make savings worth billions of dollars in the next few years.

Iron ore miner Fortescue Metals added six cents to $3.86.

The four major banks also gained strength during the day.

ANZ finished 27 cents higher at $24.09, National Australia Bank gained seven cents to $23.95, Westpac jumped 20 cents to $25.23 and Commonwealth Bank surged 46 cents to $59.44.

Australian Bureau of Statistics data released on Thursday showed Australia's mining investment boom may be peaking earlier than expected as resources companies rein in capital spending plans.

National turnover was 1.6 billion securities worth $4.11 billion, with 479 stocks up, 456 down and 388 unchanged.

The price of gold in Sydney closed at $US1719.62 per fine ounce, down $US19.86 from $US1739.48 on Wednesday.

Kylie Williams