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SYDNEY, Jan 2 AAP

January 02 2013, 12:52AM

The Australian share market was almost one per cent higher at noon as local investors were buoyed by progress in the US and an increase in the iron or price.

Local shares took a positive lead from the Wall St, where an agreement on avoiding the fiscal cliff looked close.

At 1203 AEDT on Wednesday, the benchmark S&P/ASX200 index was up 33.4 points, or 0.83 per cent, at 4,703.2, while the broader All Ordinaries index rose 33.8 points, or 0.83 per cent, at 4,687.3.

On the ASX 24, the March share price index futures contract was up 47 points at 4,663 with 5,988 contracts traded.

RBS Morgans Private client adviser Bruce Smith said the market was up across the board following the strong US lead.

"There's been a positive reaction to the news from the US so the market has picked up," Mr Smith said.

The White House and senior Republicans have struck a deal to avert a series of tax hikes and automatic spending cuts that could push the US back into recession - a situation called the fiscal cliff.

The bill has passed the Senate and will be voted on in the Republican-controlled House of Representatives on Wednesday afternoon, Australian time.

The Dow Jones Industrial Average finished up 166.03 points (1.28 per cent) at 13,104.14 on New Year's Eve.

Investors also bought riskier assets as the iron ore price rose about four per cent to $US144.90.

"Iron ore is having a good run at the moment based on the increase in the iron ore price, but also on the expectation that it would stay up for the foreseeable future," Mr Smith said.

Iron ore focused miners such as Rio Tinto, Atlas Iron and Fortescue Metals Group were all performing strongly.

Rio Tinto gained $1.29, or 1.95 per cent, at $67.30, BHP Billiton was 40 cents higher at $37.50 and Fortescue Metals Group had put on 10 cents, or 2.2 per cent, at $4.75.

Volumes were low on the first trading day of the year with national turnover at 465 million securities worth $763 million, with 537 stocks rising, 224 down and 215 unchanged.