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Aust shares close at 18-month highs

Investors have brought some festive cheer to the Australian sharemarket, sending it back up to 18-month highs on light volumes on Christmas Eve.

The benchmark S&P/ASX200 index closed 11.6 points, or 0.25 per cent, higher at 4,635.2, while the broader All Ordinaries index was up 10.4 points, or 0.22 per cent, at 4,645.6.

On the ASX 24, the March share price index futures contract was up 21 points at 4,613 with 10,439 contracts traded.

Technically the move can be attributed to the fact that US futures markets were pointing to a recovery over the weekend after fiscal cliff worries sent stocks on Wall St lower on Friday.

However CommSec market analyst Steven Daghlian said a rise in Australian equity values on Christmas Eve is pretty typical.

"On Christmas Eve the market has done well 80 per cent of the time since the mid-1980s," he told AAP.

"Going back 70 years, the Australian market has gained about 70 per cent of the time in December, which is the second-best month overall behind January."

It is also the 10th time in 12 sessions the ASX has posted gains.

All sectors finished in positive positions - albeit only modestly higher - driven by materials and financial names.

Resources giant BHP Billiton was up 16 cents to $36.86, Rio Tinto climbed 10 cents to $64.84, while iron ore producer Fortescue Metals was three cents lower at $4.35.

Shares in miner and steel and mining consumables maker Arrium fell despite it announcing some good news about it using extra capacity at Whyalla Port to ship out iron ore.

Arrium shares closed 1.5 cents down at 88.5 cents.

Gold stocks recovered some of their recent losses following falls in the commodity's price, with Australia's largest goldminer Newcrest 23 cents higher at $22.70.

Among the banks, ANZ shares improved two cents to $24.97, Commonwealth Bank was the best performer increasing 33 cents to $62.33, Westpac closed flat at $26.17 while National Australia Bank shed six cents to $24.88.

Shares in mining contractor Macmahon Holdings fell after it said it expected to make just $2 million on the $14 million sale of its construction business to Leighton Holdings, due to $12 million in redundancy costs.

Macmahon shares gave up one cent to 22.5 cents.

Billabong shares gained after the troubled surfwear retailer said it would allow its latest suitor, former board member Paul Naude, to conduct due diligence on the company.

The surfwear retailer's shares were half a cent up at 83 cents.

National turnover was light with traders skipping the market, which also closed two hours early at 1400 AEDT.

The number of shares that changed hands was 597.4 million, with a value of only $888.8 million compared to $4 billion on an average day's trade, with 417 up, 377 down and 314 unchanged.

The market re-opens on Thursday, with a quiet week expected as no economic data will be released and other major markets around the world operating limited trading sessions around Christmas.