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Aust stocks close 1.2 per cent higher

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AAP

2013-01-02

Australian stocks have begun 2013 on a bright note, climbing more than one per cent to fresh 18-months highs as investors welcomed a deal that averted the so-called US fiscal cliff.

At 1615 AEDT on Wednesday, the benchmark S&P/ASX200 index was up 57 points, or 1.23 per cent, at 4,705.9 points, while the broader All Ordinaries index rose 58.3 points, or 1.25 per cent, at 4,722.9 points.

It was the S&P/ASX200's highest close since June 1, 2011, when the benchmark index ended the local session at 4707.3 points.

On the ASX 24, the March share price index futures contract was up 66 points at 4,682 points, with 16,488 contracts traded.

The local market, which was closed on Tuesday for New Year's Day, opened up 0.3 per cent and extended gains through the day as investors took their cues from good news from Washington regarding the US fiscal cliff.

Legislators in the US Congress and the White House had agreed on a series of measures to avoid steep tax hikes and steep spending cuts - dubbed the fiscal cliff - coming into effect at the start of 2013.

While the result was not a comprehensive solution, the US economy was tipped to have slumped back into recession and world growth knocked down - in the absence of any deal.

"Asian markets have sprung to life on the first trading day of 2013, with big gains across the risk space," IG Markets strategist Stan Shamu said in a research note.

In Australia, all but one sector finished the day in green figures, with gold stocks the best-performing part of the market rising 3.17 per cent according to IRESS data.

Metals and minerals companies (up 2.51 per cent) and the materials sector (up 2.29 per cent) also had a positive day on the back of firmer iron ore prices.

BHP Billiton gained 74 cents to $37.84, while Rio Tinto was $1.61 firmer at $67.62.

Financial stocks - a large component of the Australian bourse - were 0.8 per cent higher, with all four big retail banks all posting gains.

ANZ climbed four cents to $25.09, CBA advanced 54 cents to $62.72, NAB rose 10 cents to $25.10 and Westpac was six cents higher at $26.10.

Making news, Gindalbie Metals said it had shipped its first cargo of magnetite from the Karara iron ore project in Western Australia after extensive delays.

In percentage terms, Gindalbie was the second best-performing stock on the S&P/ASX200, climbing 10 per cent or 2.5 cents, to 27.5 cents.

The spot price of gold in Sydney was $US1,680 per ounce, up $US16.66 from Monday's close of $US1,663.34 per ounce.

Preliminary national turnover was 1 billion securities worth $2.1 billion, with 656 stocks up, 290 down and 295 unchanged.